United states          u"ict ..
              Environmental Protection      Ad-ninistrative L}w Judges
              Agency            Washington, DC 20460
v>EPA      Administrative Law Judges

              & EPA  Administrators

              Civil  Penalty Decisions

              (Under  TSCA)
               Volume: 2
               January 1983 to  December 1984
                     Compiled by:
                U.S. Environmental  Protection Agency
                Office of the Hearing Clerk
                  401 M Street, S.W.
                  Washington, D.C. 20460
                   (.301) 382-4865

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                   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                             BEFORE THE ADMINISTRATOR
 In the Matter of

     Bell & Howell Company

               Respondent
                            •-..o
                            —M
)    Docket Nos.  TSCA-V-C-033?
)    034, 035               r-°

                            -j
 1.   Toxic Substances Control Act -  PCBs -  PCB penalty policy entitled
     to weight in determining appropriate penalty.

 2.   Toxic Substances Control Act -  PCBs -  Manufacturer's nameplate on
     transformers indicating a PCB dielectric fluid is not a substitute
     for a PCB mark.

 3.   Toxic Substances Control Act -  PCBs -  Fact that a transformer has a
     nameplate indicating it contains a PCB dielectric fluid is sufficient
     to establish that transformer is a PCB transformer absent some showing
     by Respondent that nameplate does not  accurately state the kind of
     dielectric fluid in the transformer.

 4.   Toxic Substances Control Act -  PCBs - Asserted difficulty of finding
     PCB rule in Federal Register rejected as a defense in mitigation of
     penalty.

 5.   Toxic Substances Control Act -  PCBs - Penalty of $7,500 assessed for
     failure to mark PCB transformers.                            r

 6.   Toxic Substances Control Act -  PCBs - Respondent's asset ledger and
     operating and service manuals held not to, satisfy the PCB recordkeeping
     requirements. ,

 7.   Toxic Substances Control Act -  PCBs - That Respondent after inspection
     in September 1980,  started keeping records on its PCBs and preparing
     the annual  document is given little weight in assessing penalty when
    . envidence shows that Respondent had done nothing with respect to keeping
     records  until it was inspected.

8.   Toxic Substances Control Act - PCBs - Penalty of $5,250 assessed for
     failure  to prepare  annual  document for 1978 and 1979.   Evidence
     showed that transformers,  which accounted for bulk of PCBs involved,
     were all  in active  'service.

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                                      - 2 -
 Appearances:

               Craig A. Benedict arid Linda Szemprick, United States
               Environmental Protection Agency, Region V, Chicago,
               Illinois, for Complainant.

               Louis M. Rundio, Sr., McDermott, Will & Emery, Chicago,
               Illinois, for Respondent.


                                INITIAL DECISION


     This is a proceeding under the Toxic Substances Control Act  ("TSCA"),

 Section 16(a), 15 U.S.C.- 2615(a), for the assessment of civil penalties

 for violations of a rule promulgated under Section 6(e) of the Act, 15

 U.S.C. 2605(e), governing the manufacturing, processing, distribution,
                                                                    I/
 and use of polychlorinated biphenyls ("PCB rule"), 40 CFR, Part 761.

 Three separate complaints were issued against Respondent Bell and Howell
                                                       w
 Company.  The first complaint (TSCA-V-C-033) alleged that Respondent
!_/   Section 16(a)  of the Act,  15 U.S.C.  2615(a),  provides in pertinent
part, as follows:  -.

     (a) Civil.   (1)  Any person who violates  a  provision of section 15
shall be liable  to  the United States for  a  civil penalty in an amount
not to exceed $25,000 for each  such violation.   Each  day such a violation
continues shall,  for  purposes of this subjection,  constitute a separate
violation of section  15.

Section 15 of the Act,  15 U.S.C.  2614,  provides  in pertinent part, that
"it shall be tin lawful  for any person to (1) fail or refuse to comply
with .  . . .(B) any  requirement  prescribed by  section  .  .  . 6 [15 U.S.C.
2605],  or (c)  any rule  promulgated  under  section ,  ..  -  6 or . .  .  (3) fail
or refuse to (a) establish or maintain  records  . .  .as required by this
Act or a rule  promulgated thereunder;  ..."

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                                       -  3  -

 at its  facility at 6500 North McCormick  Road,  Chicago,  Illinois,  had failed

 to develop and maintain records required by  the PCB rule.   A penalty of

 $1,000  was requested.  The second complaint  (TSCA-V-C-034)  alleged that

 Respondent at its facility at 2411 Howard  Street,  Evanston, Illinois, had

 improperly disposed of PCBs, and had failed  to develop  and  maintain records

 required by.the PCB rule.  A penalty of  $10,000 was requested for the

 violations of the recordkeeping requirements,  and  no penalty for  the disposal

 violation.  The third complaint (TSCA-V-C-035)  alleged  that Respondent at its

 facility at 7100 N. McCormick Road, Chicago, .111inois,  had  not dated a

 container in which PCB contaminated material had been stored,  had improperly

 disposed of PCBs, had failed to properly mark  its  PCBs, and  had failed to

 develop and maintain the records required  by the PCB rule.   A  penalty of

 $10,000 was requested for the marking violation, and of $10,000 for the

 recordkeeping violation.   No penalty was requested  for .the  dating.or

 disposal violations.

     Respondent answered  each of the complaints and  denied  the violations and
                                                                  f
 alleged that the imposition of any penalty in each case was  unwarranted and

 improper.  A hearing  on the charges in the complaints was requested.

     The three cases  were consolidated by order of the Chief Administative
                                                   *
 Law Judge.   The complaint's covering the violations  alleged  to.have  been

 found at the facilities at 2411  Howard Street,  Evanston, Illinois, and

 7100 N.  McCormick Road, Chicago,  Illinois,  were subsequently amended  to charge

 that Respondent had either improperly disposed  of PCBs at these facilities or in
            . •>*
 the alternative had failed to use  PCBs  in a totally enclosed manner as

 required by  the PCB rule.   No additional  penalties  were  requested.  Respondent

denied the amended charges.

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                                      - 4 -
      A  hearing was held  in Chicago,  Illinois, on October  26,  1982.
 Following  the hearing, the parties submitted briefs on  the  legal  and
 factual  issues.  On consideration of the entire record  and  the briefs
 submitted  by the parties, a penalty  of $12i?50 is assessed.   All
 proposed findings of fact inconsistent wit this decision  are  rejected.  ..'
         	                     Findings of Fact
 1.    Respondent Bell and Howell Company, has facilities in  the Chicago,
 Illinois,  area pertinent to this proceeding which are located at  6800
 North McCprmick Road, Chicago, Illinois ("Lincolnwood South"  facility),
 7100  North McCormick Road, Chicago,  Illinois ("Lincolnwood  North" facility),
 and 2411 Howard Street, Evanston, Illinois ("Hibband" facility) (admitted
 in Respondent's answers).
 2.   On  September 5, 1980, EPA inspectors visited Respondent's Lincolnwood
 North facility for the purpose of inspecting Respondent's compliance with
•the PCB  regulations. -Transcript of proceedings  ("Jr.") 80-81.Complainant's
 Ex. 8 at 2.
 3.   On meeting with Respondent's representatives,  the EPA inspectors were
 informed generally that the Lincolnwood  North facility had a large number
of transformers containing PCB dielectric fluid  (Tr.  82).
4.   In response to the EPA inspector's  request  to  see PCB equipment at
the facility,  Respondent's representatives  directed  the inspectors to four
transformers bearing nameplates disclosing  that  they  contained either Askarel
        *
or Pyranol, which are  trade names  for dielectric  fluid having 500 parts per
           .  '              y
million ("ppm")  or more :PCBs.     None of  these four  transformers  were marked
2/   By pretrial  order dated January  5,  1982,  I  took  official  notice that
Askarel and Pyranol  are trade names for  transformer dielectric fluid having
500 parts per million  (ppm)  or more PCBs.   Respondent has  not  shown these
facts to have been  erroneously noticed.

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                                       -  5  -

 with  the PCB mark which under  the  PCB  rule must  be  affixed  to  all  "PCB

 transformers" (i.e. transformers which contain 500  ppm or more of  PCBs),
                                              3/
 40 CFR 761.20(a) (redesignated as  761.40(a)).    Tr.  86,  88-90; Complainant's

 Ex. 8 at 2-3.

 5.    The inspectors were also  shown a  storage area  in  which was  stored

 a 55-gallon drum said to contain PCB contaminated rags,  gloves,  and

 clean-up materials.  This drum also was  not marked with  the PCB  mark  or

 dated-as required by the PCB rule, 40  CFR  761.42(c)(8)  (redesignated  as

 761.65(c)(8))f  Tr. 86-87; Complainant's Ex 8 at 2-3.

 6.    In order to make their inspection,  the EPA  inspectors  asked to see

 Respondent's records on Respondent's PCB equipment for the  three facilities

 involved in this proceeding.  Respondent was unable  to produce any records

 of its PCB items and had not prepared  the annual document of its PCB

 equipment which was required by 40 CFR 761.45 (redesignated as 761.80).

 Tr. 84-85,  103;  Complainant's Ex.  8 at 2.

 7.   Without the annual  document,  or records showing the number of PCB

 items on hand, and the quantity of PCB they contained, the EPA inspectors

 concluded that it was .not possible to complete the inspection  (Tr.  85,  134;

 Complainant's Ex.-.8 at 2).   Accordingly,  the EPA inspectors arranged to

 return on September 10,  1980.   The inspectors requested that at that time

 they be furnished  with a complete  record  of Respondent's PCB items  for all

 three facilities.   Tr.  91,  103, 109;  Complainant's Ex.  8 at 2.
3_/   The PCB  rule was" recodified in 1982,  without substantive changes being
made.  See  47 Fed.  Reg.'  19526 (May 6,  1982),  as corrected by 47 Fed. Reg.
37360 (August 25, 1982).   To make the  references'to the rule consistent with
the complaint and briefs,  the numbering prior to recodification is cited
with the redesignated number following in  parenthesis.   The definition of PCB
transformers  as  transformers containing 500 ppm PCBs or greater is found at
40 CFR 761.2(y)  (redesignated as 761.3(y).

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                                         - 6 -

   8.   On resuming their inspection of Respondent's Lincolnwood North

   facility on September 10, 1980, the EPA inspectors were given a handwritten

   inventory showing that Respondent had 32 transformers at that facility,

   filled with a total  of 5003 gallons or 23,295 kilograms (kgs.) of PCB

   dielectric fluid (Askarel or Pyranol).  This inventory bore the date 9-8-80.

..  .The EPA inspectors were also given a handwritten inventory showing that

   Respondent had 5 transformers at its Hibband facility containing a total

   of 1195 gallons, or  6192 kgs., of PCB dielectric fluid (either Askarel or

   Pyranol).   This inventory had also been prepared between September 5 and

   September 10, 1980.  • Complainant's Exs.  3,  4,  8  (Inspectors Report No. 1

   at 2-1-4,  and Inspectors Report No.  2 at 2-1-4); Tr.  91-92, 107-8.  No

   inventory was given  with respect to transformers located at Respondent's

   Lincolnwood South facility,  even though  Respondent on September 10, 1980,

   had one PCB transformer at that facility filled  with  187 gallons,  or 969 kgs.,

   of Pyranol.   Complainant's Ex.  8 at 4; Tr.  102.

   9.   Between September 5 and September 10,  Respondent had  marked the various
                                                                   r
   PCB items  at its three facilities  with the  PCB mark.   None of  these items had

   been properly marked prior to September  5,  1980.   Tr.  161,  229-30.

   10.   Other than  the  handwritten  inventories  given  to  the EPA inspectors  on

   September  10,  1980,  Respondent produced  no  other records,  or any annual  report

   for its PCB  items  either on  September  10, 1983,  or  on  a  subsequent inspection

   of Respondent's  Hibband  facility on September 23,  1980.

   11..   The first annual  document prepared  by Respondent, for  its  PCB  items  was
               - •>*
   an.annual  document covering  1980,  and completed on  June  6,  1981  (Complainant's

   Ex.  5).

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                                       - 7 -


                      Discussion and Conclusions and Penalty-
                                                                    •
      The proceedings concern the assessment of an appropriate penalty for

 Respondent's marking and recordkeeping violations.  As for  the other

...violations charged in the complaint, those dealing with the improper disposal

 of PCBs or in the alternative failure to use a PCB item in a manner other

-than totally enclosed,  relate to the leakage of transformer fluid

 which was observed during the inspections.  By agreement of the parties, these

 charges have been dropped by the EPA, with the EPA reserving the right to

 introduce evidence regarding the leakage of transformer fluids to support
                                                                      4/
 the penalty it proposes  for the marking  and recordkeeping violations.     The

 claim that Respondent did not date  a container of PCB contaminated materials

 has not been dropped, but Complainant seeks  no penalty for this violation,

 arguing instead that it  should also be considered in determining the         _

 appropriate penalty for  the marking and  recordkeeping"v-iolations.

   .   The .marking  and-recordkeeping  violations  themselves  are not disputed.   .

 What Respondent does"dispute is  the penalty  for these  violations.   Complainant
                                                                  r
 proposes a  penalty  of $10,000  for Respondent's failure to  mark  the trans-

 formers at  the  Lincolnwood  North facility, a penalty of $10,000  for its

 failure to  have an"annual document  for 1978 and 1979 at this facility, a

.penalty of  $10,000  for its  failure -to  have an  annual document for  1978 and

 1979 for its Hibband facility, and  a penalty of $1,000  for its failure

 to  have an  annual document  for 1978 and  1979 for  its Lincolnwood South

 facility.   The  total proposed penalty  comes to $31,000.
4/   Tr. 44.  Accordingly,.Count I of the amended complaint in Case No.
TSCA-V-034, and Count I of the amended complaint in Case No. TSCA-V-035,
are dismissed with prejudice.

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                                      - 8 -
         m
     Respondent contends that the violations were only technical at  best,

 were promptly remedied, and that a nominal penalty of $500 is warranted.

     TSCA Section 16(a), 15 USC 2615(a)(l), provides that persons violating

 TSCA or rules issued thereunder shall be liable for a civil penalty  in an

 amount not to exceed $25,000 for each such violation, and each day such

 violation continues shall constitute a separate violation.  Section  16(a)(2)

 (B), 15 USC 2615(a)(2)(B), provides as follows with respect to assessing the

 amount of the penalty:

          (B)  In determining the amount of a civil penalty, the Admin-
     istrator shall take.into account the nature,  circumstances, extent,
     and gravity of the violation or violations and, with respect to the
     violator, ability to pay, effect on ability to continue to do
     business, any history of prior such violations, the degree of cul-
     pability, and such other matters as justice may require.

     The EPA's office of enforcement has issued guidelines for the assessment

 of civil  penalties under Section 16,  supplemented  by a  PCB penalty policy, to

 aid EPA enforcement personnel  to assess  appropriate penalties  (hereafter
                                                 5/
 collectively referred to as "PC  Penalty  Policy").     The purpose of having

 such a general penalty system is stated  to  be "to  assure that  TSCA civil

 penalties  be assessed in a  fair, uniform and  consistent  manner;  that the

 penalties  are appropriate for the  violation committed; that economic

 incentives  for violating TSCA  are  eliminated;  and  that persons will  be deterred
                                6/
 from committing  TSCAviolations."   These certainly are  unexceptionable goals
              /
 in carrying  out  a  civil  penalty  policy and seem to be consistent with Section

 16.   The rules of  practice  which govern  these  proceedings  provide with respect
5/ '  See  45 Fed. Reg.  59770  -  59783  (September 10, 1980).  The  guidelines
start at  59770, with the  PCB penalty policy supplementing these guidelines
beginning at 59776.                                   '        	

6/   45 Fed. Reg. at 59770.

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                                       - 9 -

 to my assessment  of a  penalty that I  must consider these guidelines.
                                                     «
 and further that  if I  assess  a penalty different in amount from the penalty

 proposed  in the complaint  (which  should also be the penalty recommended
                              •                                  y
 in the PCB  penalty  policy), I must give my reasons for doing so.     Thus,

 I  am,  in  effect,  required  to  give deference to the PCB penalty policy  •

 but I  am  not bound  to  follow  it and can assess a different penalty if I

 have reason to regard  the  penalty recommended by the PCB penalty policy as

 inappropriate.  Such a requirement seems entirely in accordance with  the

 settled rule that agency policy statements  interpreting a  statute  are
                     - •  •                                              8/ -
 entitled  to  be given'such weight  as by their nature seems  appropriate.

     Accordingly, then, consideration  will  be given to determining  whether

 the  $31,000  penalty recommended by  Complainant conforms to  the  PCB  penalty

 policy and  if it does, whether  it  is appropriate under the  facts in this

 case, and makes due allowance for  those  factors  which  the statute says  must

 be considered.                 .
7/   40 CFR 22.27(b).

8/   See SRidmore v. Swift & Co., 323 U.S. 134, 140 (1944).  Respondent
early in this proceeding requested that I withdraw arguing that the
requirement that I 'consider the guidelines will deprive Respondent of a
fair and impartial hearing, and that in a prehearing letter I had sent out
to accomplish some of-the purposes of a prehearing-conference, I had indicated
I would consider the guidelines by requesting Complainant to show how the
proposed penalty conforms to the PCB penalty policy.  I denied the request
stating that my ability to render a fair and impartial judgement would not be
affected because I was free to assess a penalty different from that recommended
by the guidelines,and complaint, if I had reason to regard the recommended
penalty as inappropriate.  See report of prehearing conference dated February 24,
1982.  Respondent moved before the Administrator to disqualify me on similar
grounds, which motion is; still pending.  See Tr. 44-45.

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                                      -  10 -
                               The  Marking Violation
      In line with  the  allegations  of  the  complaints in this proceeding,
 Complainant seeks  a  penalty  for  the four  unmarked transformers found at
 the Lincolnwood North  facility on  the September  5th inspection.   Under
 the PCB penalty policy the statutory factors  of  the nature, extent and
 circumstances of PCB violations  are treated as bearing upon the  gravity
 of the  violation.  All  four  factors are incorporated in two components,
 the extent of potential damage (measured  by the  quantity of PCBs involved),
 and the probability of such  damage, to determine  an initial  "gravity based"
 penalty.  This gravity  based penalty can  then be  adjusted upwards  or downwards
 as  merited by consideration of the other  statutory  factors,  i.e.,  culpability,
 history of violations,  ability to pay, ability to continue  in  business,  and
                                          I/
 such other matters as justice may require-.    Complainant argues that $10,000
 is  the  appropriate gravity based penalty  under the  PCB  penalty policy for the
 failure to mark the four transformers, given the quantity of PCBs  involved
 {over 1700 kgs.)  and the probability of damages created  by  the absence of
              JO/  r     •
 a proper mark.      Complainant would recognize no factors which would
9/   45 Fed. Reg. at 5977.
IP/  The inventory furnished by Respondent showed that the four unmarked
transformers (a 500 KVA unit located in Building No. 1-Center, and three
167 KVA units in Building No.  1-South) contained a total, of 330 gallons of
Pyranol (Complainants Ex. 3; Complainant's Ex.  8 at 3).'  Using a conversion
rate of 5.18 kgs. per gallon (Complainant's Ex.  8, Compliance Inspection
Report No.  1 at 2-1-4), the amount of PCBs totalled 1709.4 kgs.  A violation
involving 1000 to 5000 kgs. of PCB is classified as "significant" in extent
of potential damage.   Complainant places the violation in level 3 in
probability, of "damage (out of  a scale ranging from 1 to 6, with 1 being the
highest), which according to the penalty schedule in the PCB penalty policy
would call  for a penalty of $10,000.   See 45 Fed." fce'g.. at 59777.

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                                      - 11 -

 justify mitigating- this penalty,  and indeed argues that it is emminently
                                                                     •
 reasonable since that the record  disclosed that Respondent had not properly
                                                                      U/
 marked any of the 38 PCB transformers at its Chicago area facilities.
           •
      The EPA mark contains a warning that PCBs are present, and must be

 specially handled and'disposed of,  and also provides a reporting point in
                                   12/
 the event_pf an  accident or spill.      There can be no doubt of the

 importance of the PCB mark in insuring that PCBs will  be properly handled
                                                               I!/
 and disposed of  so as not to injure health or the environment.

      Respondent  in attempting to  minimize the violations argues that since

 the transformers  had  nameplates indicating that they contained Pyranol  or

 Askarel,  which are trade  names  for  PCB dielectric fluid, persons would  be

 warned  that  the  transformers  did  contain  PCBs.   A similar argument was  made
 ll/  Complainant would also point to Respondent's  failure  to  mark  the  48
 capacitors at its Lincolnwood North facility as evidence of Respondent's
 general disregard of the PCB rule's marking requirements.  Brief at 4.   The
 evidence as to the status of these capacitors under  the PCB rule,  however,
 is inconclusive.  The PCB rule requires only that  large capacitors be  marked.
 40 CFR 761.20 (redesignated as 761.40); Complainant's  Ex.  7 at 23.'  A  large
 capacitor is defined as one containing 1.36 kgs. (3  IDS.)  or  more  of dielectric
 fluid.  40 CFR 761.2(d) (redesignated as 761.3(d)).  Respondent's  capacitors
 each appeared to contain about one-fourth gallon of  fluid  (Complainant's Ex. 5).
 By Respondent's calculations, 6410 gallons of PCB  oil  equalled 36,344  kgs.
 (Complainant's Ex. 5).  Under this ratio, one gallon would be equal  to 5.669
 kgs., and one-fourth gallon to 1.417 kgs., making  Respondent's capacitors
 large capacitors.  Respondent, however, points to  the  fact that'the  EPA
 inspector in his report used a ratio of 5.18 kgs.  per  gallon  (see  Complainant's
 Ex. 8, Inspection Report No. 1 at 2-1-4), according  to which  the capacitors
 would contain only 1.295 kgs. of fluid, and would  not  have to'be marked.
 Because of this inconsistency in the evidence, Respondent's capacitors  are
 not considered as being covered by the marking requirements.

J_2/ .See 40 CFR 761.44 (redesignated as 761.45).

 13/  The importance of the marking of PCBs in the"regulatory  scheme  is  shown
 by the. fact that markings of PCBs is specifically  required by the  statute.
 See TSCA,  Section 6 (e)(l)(B).

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                                      - 12 -  .

 in the case of Briqqs & Stratton Corp., TSCA Appeal No. 81-1, (February 4,

 1981), and rejected by the Judicial  Officer for the obvious reason'that

 the manufacturer's nameplate does not like the EPA-approved mark contain

 instructions about the proper disposal of PCBs.  Briggs & Stratton Corp.,

 supra at 29.  Nor does the nameplate like the EPA-approved mark contain

 a clear and unmistakable warning that PCBs are a toxic environmental  con-

 taminant requiring special  handling  so that all persons who do come into
•• ^,          ...                               .                    ....
 contact with leaks or spills  from the transformers  will not only know that

 PCBs  are present  but  they will act to avoid any injury to themselves  or to
                !!/
 the environment.      Respondent  may  possibly know that PCBs must be care-

 fully handled, but if it  did,  it does  not appear to have disseminated
                                                                 15/
 information  about the careful  handling  of PCBs  to its  employees.

 Finally,  while, as Respondent  argues,  Respondent's  employees who participated

 in  the  inspection  knew that its  transformers contained PCBs, it  does  not

 follow  from  this  that all employees who would be exposed to any  leaked or
                                                       »•
 spilled fluid from the transformers would  know without the  presence of the

 PCB mark  that the fluid is a PCB fluid.- Consequently,  Respondent's claim

that  the  presence of  the manufacturer's label makes the  violation5" less

serious is found to be without merit.

      Respondent further argues that no harm resulted from its failure  to

affix the proper label, because Respondent in any event did observe the

special handling and disposal  requirements.  Respondent points to its

having placed PCB  cleanup materials in a steel  drum  and storing' the drum

in a proper .storage area.   This shows some attention to the PCB rule,  but
W  Workers  exposed  to-'PCBs  must  avoid  skin contact with and ingestion of
PCBs by wearing  protective clothing  and  by  washing  their hands and removing
contaminated  clothing.   See the  preamble to the  EPA's proposed PCB disposal
and marking rule,  42  Fed. Reg. 26564,  26566 (May 24,  1977),  a document of
which I may take official notice,  44 U.S.C.  1507.   See also  Complainant's
Ex. 7 at 36-37.   '

     Tr.  161, 172-73.

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                                      - 13 -
 does not address  the risk created by the absence of an EPA-approved mark
 that employees  who did encounter any PCBs, would not be aware that they
 were being  exposed to a chemical which required special handling.  Nor is
 it mere speculation to find  that there was such a risk.  That transformers
 do leak is  demonstrated by the fact that the EPA inspectors found several
                                              16/
 leaking transformers during  their inspection.     Also, the EPA notes in the
 preamble to its PCB rule that  routine servicing of transformers may result
                 HI
 in some exposure.
      The PCB penalty policy  bases  the size of the penalty on the probability
 of harm inherent in "the  violation.   Whether harm actually resulted is not
                        W
 considered  as a factor.      This  approach  seems emminently reasonable.  To
 reduce  a penalty because  no  harm occurred  would be tantamount to rewarding
 a  violator  because  of what may well  be  simply its good  fortune in escaping
 the consequences of its  violations,  and  such a  policy would certainly not
 encourage compliance with the rule.   Hence,  the penalty will  be  assessed
 according to the probability of  damage as  indicated  by  the record in  this
 proceeding.
     The absence of the EPA approved mark  does  create the  potential that
 spills  from Respondent's transformers, which  could "involve a  large quantity  of
1_6/  Tr. 96, 109-111, Complainant's Ex. 8 at 3, and PCB .compliance
Inspection Report No. 1 at 2-1-4.
IT/ . See 44 Fed.  Reg. 31531.
J_8/  PCB penalty  policy, 45 Fed.  Reg. at 59777. ' See also TSCA Civil  Penalty
Guidelines of which the penalty policy is a part,""45 Fed. Reg. at 59772.

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                                     - 14 -
 PCBs, would not be properly handled or cleaned up, and that transformers
 containing a large quantity of PCBs would not be properly disposed  of.
 The greatest risk of exposure would appear to be to small quantities "of
                                   19/
 PCBs leaking from the transformers.     Respondent, also, was not
 completely oblivious to the PCB rule requirements.  Since it had properly
 stored some PCB cleanup materials, the possibility that it would use the
 required care in cleaning up spills or leaks or in disposing of its
 transformers, cannot be entirely dismissed.
     On the other hand, Respondent's conduct has not been such as would
 justify the assumption that there was only a minimal  risk of harm.  The
 record in this case shows that the absence of proper marks on the four
 transformers named in the complaint resulted from Respondent's complete
 disregard of the marking requirements,  since none of Respondent's 38
                                                               207
 transformers in its three facilities had  the EPA-approved mark.
 Respondent claims that it had  affixed labels to  the other transformers but
 discovered that the labels were incorrect.   Respondent has given no details
 about the format of these labels  which  would show at  least some  compliance
with the PCB rule,  and Mr. Horn's explanation for not having  the correct
 labels  is unconvincing as evidence of a good faith  effort to  comply with
19/  Complainant  characterizes the leaks at the Hibband facility  as "moderate."
Brief at 24.  The inspection report, however, referred to  the  leakage as
being "very minor."   Complainant's Ex. 8, Compliance Inspection Report No.
3 at 2-1-4.
20/  See Finding  of  Fact No. 9, supra.

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                                      - 15 -

 the PCB rule.     Also  bearing  upon  Respondent's general  lack of compliance

 with the PCB rule is  its  failure  to  maintain an annual  document for. its PCBs,

 a matter which  is discussed  further  below,  and its failure to comply with the

 EPA's requirements  that the  containers in which PCBs  are  stored must be dated
      ..    22J             .       .......             	-
 and marked.      In  view of such evidence, the fact that Respondent did have
                      /
 some PCB cleanup material properly stored cannot be accepted as proof that

 Respondent always or  even generally  observed the special  handling and disposal

 requirements, contrary  to what Respondent appears to'contend.   Rather, the

 evidence is that Respondent's compliance  with the PCB rule was  haphazard at

 best.               .  -  *
          *
      The PCB marking  requirements for  Respondent's  transformers have  been  ••

 in  effect since January 1, 1979.  Thus, for  well  over one  year  Respondent

 left  its  transformers unmarked, creating  for the  reasons already discussed,
                                                            237   .
 a real risk of injury to persons if not to the  environment.      In  appraising

 the extent of the risk,  account may also  be  taken of  the undisputed evidence

 that  it was  not four transformers which were  unmarked, but 38 transformers,

 containing a total  of 6385 gallons of PCB, equal  to over 33,000  kgs.
21/  Mr. Horn's explanation was that he did not personally take care of
the labeling but delegated it-to the maintenance-department.  He also
seems to blame the mistake on the lack of clarity of the PCB rule.  Tr.
163, 190-91, 192-93,  197-200.  The rule, however, could not be clearer
providing as it does  an actual  facsimile of the mark. 40 CFR 761.44,
Credesignated as 761.45).   Consequently, Respondent's failure to apply the
proper mark, to say the least,  shows a very careless or indifferent attitude
toward meeting the PCB rule requirements.

22/  See Findings of  Fact  No. 5, supra.
                      *•'                         . ^ ..
23/  The only change  in Respondent's inventory of its transformers since
December 31, 1977,  has been the possible addition of one transformer.  Tr. 238.

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                                      - 16 -
                                                                    •
      Respondent states, nevertheless, that it was uncertain whether its

  transformers were PCB transformers (i.e., contained PCB at 500 ppm or

  greater).  Respondent's uncertainty over its obligation to mark its  •

  transformers is unpersuasive as evidence justifying a minimal penalty, for

  the following reasons:

      First, it is not disputed that Askarel  or Pyranol  are trade names for
                           •                           24/
  dielectric fluids containing 500 ppm PCBs or greater.     The fact that a

  transformer has a nameplate  indicating that it contains a PCB dielectric fluid

  is sufficient to establish that the transformer is  a PCB transformer, absent

  some showing that the nameplate does not accurately state the kind of
                                     25/
  dielectric fluid in the transformer. .    Respondent, however, never attempted

  to show that the PCB content of its transformers  labeled as containing Askarel

  or Pyranol had been changed  by the addition  of non-PCB  mineral  oil. • Instead,
                                                             26/
  it expressly agreed that it  would  not present such  evidence.      Accordingly,

  it is found that Respondent  had no reasonable basis  for believing that its

  transformers contained  less  than 500  ppm PCBs.
 247  These  facts were officially noticed.  See Order granting  official  notice
 in part dated January 5, 1982.  Respondent has never questioned  the facts
 noticed.  In fact,. PCB dielectric fluids are likely to contain PCBs well  above
 the 500 ppm level,  as Respondent itself recognized.  See Respondent's
 Procedure and Information Bulletin, Complainant's Ex. 6 at 2.

 25/  The question  of the probative value to be accorded the transformer's
 nameplate was first considered by me in this proceeding in my  order denying
 Complainant's motion for an accellerated decision, issued on January 25,  1982.
 I then held that the presence of a PCB nameplate is sufficiently persuasive
 to make a prima facie  case that the transformer is a PCB transformer,  so as
 to put on Respondent the burden of producing credible evidence to show  the
 contrary. .  I further said that it was not unreasonable to place  such a
 burden on Respondent sihce it would be the one naturally possessed of relevant
 evidence as to changes in the transformer's dielectric fluid.  See order
 denying motion for  accellerated decision at 4-5. ~ See also Commonwealth of
 Puerto Rico v. Federal Maritime Commission, 468 F. 2d 872, 881 (D.C.  Cir.  1972)

'26/  See agreement  of counsel, Tr.  43-44.

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                                      -  17  -

      Second, any doubts Respondent ir.ay  have  had  about whether its -transformers

 contained PCBs of-500 ppm or greater could have  been  easily resolved  so as
                                                                    •

 not to violate the PCB rule.  Respondent could have tested  the dielectric
                                   '                                     27/
 fluid to determine its PCB content, but never appears  to  have done so.

 In lieu of testing, Respondent could have simply assumed  that its transformers

 were PCB transformers1 and marked them.   In fact this seems  to be  precisely
                                                                             x-
 what Resjjp.ndent did following the EPA's inspection.

      Respondent's  representatives in explaining why the transformers had not

 been properly  marked before  the  inspection testified that they did not know

 about  the  PCB  rule's requirements prior to the inspection and did not
               ...         28/
 understand the  requirements.      Respondent in its brief also contends that

 the EPA is at  fault for Respondent's  lack  of  detailed  knowledge about the
         297
 PCB rule.      Publication  in  the  Federal Register,  however,  was sufficient

 to put  Respondent on  notice of the PCB  rule's requirements.   Respondent is

 as accountable  for  knowing about  the  rules  and regulations- in the  Federal

 Register which  apply  to its business, as it is for  knowing about the  laws
            ipy      .      -
 which do so.     At first glance, Respondent's complaint about the, difficulty
27/  See. Tr. 183 *'

28/.  See Tr.  170, 196-98 (Horn); 206-07 (Weigand).

297  Respondent's brief at 15.                          •      ,   .

307  See-44 U.S.C.  1507.  In Federal  Crop Insurance Corp. v. Merrill, 332 U.S.
380,  384-85 (1947),  the Supreme Court stated, "(JJust as everyone is charged
with  knowledge of the United States Statutes at Large, Congress has provided
that  the appearance  of rules and regulations in the Federal  Register gives
legal notice  of their contents."

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                                      - 18 -

 of finding the PCB regulations in the massive amount of infornation  in

 the Federal-Register,  may have some superficial appeal as demonstrating

 Respondent's  lack of culpability.  It is entirely unpersuasive, however,

 under the circumstances  of this case.  Respondent is a large corporation
                    .             •
         •
-presumably experienced in knowing how to keep up with the numerous laws
                  siy
 it is subject to.    ;  Here,  Respondent admittedly knew that its transformers

 contained  some PCBs, which  should have alerted it to the relevancy of the

 PCB regulations,  and there  were four  prominent notices  published by the
                                        32/
 EPA relating  to the regulation  of PCBs.      Indeed,  Mr.  Weigand, Respondent's

 vice  president responsible  for  advising  on health  and  safety regulations, was

 himself unsure as to how much Respondent's« personnel actually knew about the
                             33/
 requirements of the PCB rule.     In  sum, Respondent's argument that

 it is less culpable than it would be  if the EPA had  specifically informed it

 of the PCB. rule's, requirements, must be rejected.  Not only  would  acceptance
                                                   .->°>. ^ •-
 of such a claim be in derogation of the law which specifically  provides  that

 publication of-a document in the Federal Register-is sufficient  notice of the
317  See Tr.  224

32/  See proposed  PCB  marking  and  disposal  rule,  42 Fed.  Reg.  26564
"[May 23, 1977);-final  PCB marking  and  disposal  rule,  43 Fed.  Reg. 7151,
(February 17,  1978); proposed  final  PCB  ban rule,  43  Fed.  Reg.  24802
(June 7, 1978);  final  PCB ban  rule,  44 Fed.  Reg.  31514 (May 31, 1979).
              /
337  See Tr..229.  The  testimony of  Mr.  Horn, Respondent's electrician in
charge of maintaining-  the transformers at the Lincolnwood  North and Hibband
facilities, as to  his  knowledge about  the PCB rule  prior  to the September 5th
inspection is so contradictory as  to provide no clue  whatever to what he
actually knew.-  See Tr. 191-197.

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                                      - 19 -

 contents .pf the document  to  a  person  subject to or affected by it,.but

 the claim appears to be more a convenient excuse than the real reason-
                                                                    •
 for Respondent's non-compliance with  the  PCB rule.

     As to Respondent's dificulty  in  understanding the marking requirements,
          •
 so  far as it did know about  the PCB rule,  although on their face the

 requirements seem clear enough, Respondent could have turned for clarification
                                                                        34/
 to  the preamble of the rule  in  which  the  EPA explained its regulations.

 Respondent could also have asked the  EPA  for advice instead of sitting back

 and waiting for the EPA to advise  it.

     Accordingly, taking account of the nature,  circumstances,  extent  and

 gravity of the violation, the degree of culpability,  and  such  other  matters

 as justice would require be considered in  determining the penalty,  I find

 that the appropriate penalty to be assessed  for  the marking  violation  under
                                         35/
 the circumstances of this case is $7,500.      A  penalty in  this amount is

 merited not only as  being appropriate to the  violation "committed but also to

 serve as a deterrent against further violations.
347  The final  ban rule contained a detailed explanation of the EPA's marking
requirements,  because of the change in the rule brought about by regulating
transformers  that contained 50 to 500 ppm PCBs, as well as transformers that
contained 500  ppm PCBs or greater.   See 44 Fed. Reg. 31517-518, 31521.  The
preamble to a  rule is an authoritative aid in construing a regulation.  See"
Wiggins Bros.,  Inc.  v. Dept.  of Energy, 677 F. 2d 77, 88 (Temp. Emer. Ct.
AppI, 1982).'

35/  Respondent has  not raised any  defense putting in issue either its
ability to pay  a penalty or the effect a penalty would have on its ability
to continue in  business.

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                                       -  20 -

                 The Record keep inq and Annual Document..Violation
              I      ^^"~™ '   • •   J .  M _«_     —       — —    --    —«-»^^^»    _
                                            1                         •
       The PCB rule requires Respondent,  beginning July 2,  1978, to  develop
                                                               36/
  and maintain records in the disposition of PCBs and PCB items.      These
           »
  categories would include Respondent's PCB transformers, PCB capacitors
                                                        37/
  and its stored containers of PCB contaminated material.     The  records.are

-to  .form the basis of an annual document prepared for each facility by July 1,

  covering the previous calendar year.  The records and the annual documents

  are to be maintained for at least five years after the facility  ceases  using

  or  storing PCBs and PCB items.  The annual document to be prepared from the

  records is to contain information about the quantities of PCBs and PCB  items

  in  service, removed from service, placed into storage for disposal, or  placed
                                                                      38/
  into  transport for disposal  and certain other prescribed information.

       The recordkeeping and annual document requirements were part  of the

  PCB marking and disposal  rule issued in February 1978, -which rule  was later

  incorporated in the final  ban rule.   In-its  preamble to the marking and

  disposal  rule,  the  EPA said  that the recordkeeping and annual  document
 36/  40 CFR. 761.45 (redesignated 761.80).

 37/  See definitions  of PCBs  and PCB Items,  40 CFR 761.2(s), (X)  (redesignated
 as 40 CFR 761.3(s),  (X),)..  Respondent contends that its  capacitors do not have
 to be referred  to .in_the annual  document because it has  not been  shown that they --
 are PCB large capacitors.   Brief at 14.   Whether a capacitor is a large or small
 capacitor would be relevant only to the  question of whether Respondent must
 maintain records and  prepare  an  annual  document.   Here,  the maintenance of records
.and preparation of an annual  document for  each.facility  is required by the fact
 that Respondent has one or  more  transformers at each facility.  The annual
 document which  must be prepared, however,  pertains to all  "PCBs and PCB Items."
 40 CFR 761.45-(redesignated 40 CFR 761.80).   Capacitors which contain PCBs are
 "PCB Items"  within the meaning of the rule.   40 CFR 761.2(x).

 38/  See 40  CFR 761.45.

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                                      - 21 -

 requirements,  "will  assist the Agency in determining compliance with the
         »                                                         •
 regulation and  should  also assist ov/ners and operators in maintaining
                                                           39/      .
 effective inventory  control  and insuring timely disposal."     In con-

 struing the requirement,  the EPA has used similar language.  Thus, in

 National Railroad Passenger  Corp.  (AMTRAK),. TSCA Appeal Wo. 82rl at 9.    .

 (April 27, 1982), it was  stated that ,  "[t]he records required by the

 regulation are  to be used by the owner  as a basis for preparing an annual .

 report, for insuring appropriate control  and handling of PCBs and to assist

 the Agency in enforcement of the regulations."

      It is not disputed that Respondent had prepared no annual  report for

 1978  and 1979.  Respondent contends,  however, that its  asset ledger listing

 its assets for financial  reporting purposes,  and  the operating  and maintenance

 manuals which came with the  transformers  contained the  information needed

 to prepare an annual  document and, therefore, met the recordkeeping requirements
                40/     /   .
 of the PCB rule.     Respondent  contends,  then, that its  failure  to have  an

 annual report, on .hand on.September 5, ..1980, was only a.  de minimi's  violation, .

 easily remedied by having available at  the  September 10th inspection  a  doc-
                                                                 r
 ument containing essentially all the  information  needed for  an  annual document.

 There are  several  serious flaws  in this argument.
!39/  42 Fed,  Reg..265.70 (May 24," 1977).... The. preamble of .a regulation can.
properly be consulted in determining the meaning of the regulation.
Wiggins Bros.,'Inc.  v.  Dept. of Energy, 677 F. 2d 77, 88 (Temp. Emer. Ct.
App. 1982).While in this case the statement was in the proposed rule,
the final  rule  referred to the proposed rule, and discussed.changes made
in the final  rule  as a  result of comments received on the proposed rule.
Consequently,  the  preamble to the proposed rule is clearly a part of the
legislative history  of  the rule, and recourse to it for purposes of con-
struing the rule is  proper.   Since the preamble to the proposed rule was
published  in  the Federal  Register, I may also take official notice of its
contents.   44 U.S.C.  1507.

40/  The asset  ledger and operating and maintenance manuals are described at
219-220.   Mr. Weigand admitted that these records were not kept for the
specific purpose of.complying with the PCB rules.  Tr. 222.

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                                      - 22 -
         »
      In the  first  place,  it  has  not been shown that the records would

 contain all  the  information  required by the annual  document for PCB* items

 removed from service or stored for-disposal.   Respondent contends that it had

 accurately and completely kept track of the  cleanup material in storage, but,
                                       4V          .             '
 this is without  support in the record.      In  fact, the annual  document for the
                     t                         •

 Lincolnwood  North facility that  Respondent ultimately  produced  for..1980, did_

 not show~either  the date that PCBs  in  the 55-gallon drum were put into storage
                                                     -42/
 for disposal or  the weight in kilograms  of these  PCBs.

      Second, it  is unclear whether  the asset ledger or  service  and operating

 manuals  could even "form the basis of an  annual document"  for Respondent's
             '«/
 transformers.     If they could,  presumably, Respondent  would have been  able

 to  furnish annual documents  for 1978 and  1979.   Respondent,  however, instead

 of  producing an annual  document for its PCB transformers -for 1978  and  1979,

 had Mr. Weigand testify generally to the fact that  in this two-year  period
                                                                         44/
 there was an  expansion  program and one transformer could have been added.

 No  records were produced  to  support this testimony,  even though according to
41/  Respondent's  brief at  2,  6.   Respondent  cites the inspection report for
the claim that  the date the cleanup materials were placed in storage was
available in  Respondent's records.  The  report,  however, appears to be based
on what the EPA inspector was  told and not.on an  actual  inspection of any
records.  Tr. 84,  93.

42/  See Complainant's  Ex.  5.

43_/  See 40 CFR 761.45(a) (redesignated  as 761.80(a)).

447  Tr. 238-39. -

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                                     - 23 -

 Respondent the records were readily available and  enabled  Respondent to
                                                      45/
 accurately and completely keep track of its PCB  items.

     Finally, it is to be noted that in producing  the handwritten  inventories

 requested by the EPA inspectors and ostensibly made up from  Respondent's  records;
  .
 Respondent omitted the.PCB transformer at its Lincolnwood  South facility,

 which also raises doubts about how effective Respondent's  records were in en-

 abling Respondent to keep track of its transformers.

     In sum, Respondent's argument that the asset  ledgers  and maintenance

 and operating manuals satisfy the recordkeeping requirements of the  PCB

 rule is found to be unsupported by the record.

     Respondent's failure to prepare annual  documents for  1978 and 1979,

 or have adequate records for those years cannot be dismissed or glossed over

 as unimportant.   The annual  documents show the changes from year to year,

 and the maintenance of proper records provide a means for both Respondent

 and the EPA to verify that all  changes in PCBs occurring in the period

 intervening between two  annual  documents are reflected in the current annual

 document._  In this case, however,  the EPA is simply being asked to rely on

 Respondent's undocumented recollection of the status and disposition of its

 PCB transformers  and other PCBs for the period prior to  1980, a situation

which the PCB rule was clearly  intended to prevent.
45/  Respondent's brief at 6..  Respondent cites  Mr.  Weigand's testimony to
support its  claim that Respondent had  adequate records.   The testimony refers
to data sent by Respondent to its counsel  over a two year period which were
used in compiling the 1980 annual document.   Tr. 213-15,  218-229.  None of
this data was provided, however.

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                                     - 24 -
      Further, without an annual document showing the  number  of PC&
 transformers at each facility and their PCB contents,  the  EPA inspectors
                                                                    467
 felt that they could not make a complete inspection on September 5.
 Respondent contends that the EPA inspectors were asking for  an "inventory"
                                                                            IT/
 of Respondent's PCB equipment when no such record was  required by the rule.
 The argument, however, does not place in proper perspective  the situation
 in which—the EPA inspectors found themselves on their  September 5 inspection.
 At a minimum, the EPA inspectors had the right to expect that they would be
 shown the latest annual  document (for 1979) and the records  that.were used to
 compile it.   Since Respondent did not produce any of this information,  the
 inspectors reasonably requested that an inventory be prepared  to  assist them
                                   48/               •
 when they resumed their  inspection.
     Respondent to show  its good faith  put in evidence that  it  did  prepare an
 annual report by 1980 on time and,  has  prepared an  annual  report  for  1981,  and
 also has prepared the quarterly reports required by the Interim Measures
        497                                   ......
 Program.     Complainant contends .that  these reports are incomplete or
 were not prepared on time.   It is not necessary to  decide  whether? Complainant
46/  See Complainant's  Ex.  8 at 2.   Respondent  contends  that the inspection
on September  5 was  not  completed because  a  special  corporate meeting for
facility managers had been  called at 2:30 P.M... ..Nevertheless, .the inspection
report as supplemented  by Mr.  Mortenson's testimony (Tr.  84-85), clearly
indicates that the  EPA  inspectors considered  themselves  unable to complete
their inspection without seeing some record of  the  total  number of transformers
at Respondent's facilities.
47/  Respondent's brief at  11-12.
            . •»
48/.  See Tr.  84-85, 10~9, 125;  Complainant's Ex. 8 at  2.
49/  See 46 Fed. Reg. 16095  (March 10, 1981).   "*"   -

-------
                                     - 25  -
 is correcf because the evidence offered by Respondent to show its good faith
 after  the  inspection must be evaluated in  light  of the fact that Respondent
 did nothing in the way of keeping records  until  it was inspected.
     Complainant's proposed penalty of $21,000 for the recordkeeping
 violations is based on an estimate of probable damage which I believe is
                                           spy
 not justified under the facts of this case. •     Here  the transformers, .-
    -                *~ ^.^
 which  accounted for the bu-lk of the PCBs involved,  were all  in active
 service.  The recordkeeping requirement appears  to  be directed mainly
 toward insuring that PCBs will  be disposed of in accordance  with  the
 regulatory requirements,'so that the potential for  harm is  likely to be
 greatest in situations  where PCBs are being removed from service,  or stored.
 and  disposed of without the maintenance of proper records.   Here  the
 gravity of the offense  lies not so much in the potential  for harm as in
 Respondent's neglect to carry out its responsibilities  under the  PCB rule.
 This does not mean that only a  minimal  penalty is justified  under  the
 circumstances of this case.   As already noted, the recordkeeping  requirements
 have the dual  function  of assisting both the EPA in enforcing the? PCB rule
                                          5V
 and Respondent in complying with the rule.      Respondent may have felt
 that the records and annual  document were not important to it, but the
 importance of these  records  to  EPA's inspectors  has been clearly shown
50_/  Complainant based  on  the quantities of PCBs involved at each facility
would classify the  recordkeeping  violations at the Lincolnwood North and
Hibband facility as major  violations  and the violation at the Lincolnwood
South facility BS a minor  violation.   The probability of damage is placed
at level  4.  -
5iy  Supra at  21.

-------
                                     - 26 -

 in this  record.  The penalty, accordingly, must be large  enough  to insure

 that Respondent will carefully adhere to the recordkeeping  requirements
                                                                     •

 from now on.  I find, then, taking into account the pertinent statutory

 factors, that the appropriate penalty to be assessed for  the  recordkeeping
                    52/
 violation is $5,250.

      Accordingly it is, concluded that a total penalty of $12,750  should-

 be assessed for the violations found in this case.
                                           53/
                                      ORDER

      Pursuant to Section 16{a) of the Toxic Substances Control Act (15  U.S.C,

 2615(a)), a civil penalty of $12,750 is hereby assessed against Respondent

 Bell  and Howell Company, for the violations of the Act found  herein.

      Payment of the full amount of the civil  penalty assessed shall  be  made

 within sixty (60) days of the service of the final order upon Respondent

 by forwarding to the" Regional  Hearing Clerk a cashier's check or certified
                                       .                »•
 check payable to the United States of America.
                                        ^
                                        Gerald Harwood
                                        Administrative Law Judge
February 3, 1983
52/  This translates into $2,500 for each  of the  violations at the
Lincolnwood North and Hibband facilities and $250 for the Lincolnwood South
facility.                                                  --. .

52/  Unless an appeal is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects to review  this decision on his/her
own motion, the Initial  Decision shall become the final  order of the
Administrator (See 40 CFR 22.27(c)).

-------
22

-------
               UNITED STATES ENVIROl^ffiNTAL PROTECTION AGENCY

                         BEFORE THE ADMINISTRATOR
In the Matter of                     )
                                     )
N.O.C., Inc.,                        )  Docket No. II-TSCA-PCB-81-0105
     T/A Noble Oil Company,          )
                                     )
                         Respondent  )
1.   Toxic Substances Control Act - Rules of Practice - Motions to
     Reopen the Hearing - Where primary basis of notion to reopen
     the hearing was contention that scientific data on variability
     (standard deviation) of analyses of PCBs in waste oil matrices
     first made available subsequent to the conclusion of the hearing
     cast doubt on the conclusion in the -initial decision that level
     of PCBs in Respondent's oil tank was in excess of regulatory limit
     of 50 ppm and the only evidence offered in support of the motion
     was data on inter laboratory variability (the EPA laboratory which
     made the analysis in question not having participated in the
     studies which generated the interlaboratory variability data), and
     under all the circumstances it did not appear likely that such
     data would change the result, the motion would be denied.  Where
     validity and accuracy of analysis showing PCB concentration in
     waste oil tank to be in excess of 50 ppm was in issue, matters
     bearing on whether such analysis was properly conducted which
     could have been more thoroughly explored at the hearing were
     cumulative and could not support a motion to reopen the hearing.


2.   Toxic Substances Control Act - Rules of Practice - Motions to
     Reopen the Hearing - Where basis of alternative motion to reopen
     the hearing was contention that Respondent refrained from offering
     evidence concerning propriety of proposed penalty because of belief
     that penalty would be considered, if at all, only at a second hearing
     after liability was first determined and no evidence was offered to
     show that asserted belief was reasonable,  alternative motion would
     be denied.

-------
Appearances for Respondent:

                              Alan G. Kelley, Esq.
                              Greenberg, Kelley and Prior
                              Attorneys at Law
                              Trenton, New Jersey

Appearances for Complainant:

                              Gregory T. Halbert, Esq.
                              Office of Regional Counsel               c-
                              U.S. Environmental Protection Agency     °^
                              Region II                                :z
                              New York, New York                       ^


                           Decision Denying Motion to                   -o
                               Reopen the Hearing                       co
                                                                        * •

                                                                        CD
     An initial decision, assessing a penalty against Respondent of

$40,000 for violations of Section 15 of the Toxic Substances Control Act

(15 U.S.C. 2614), was issued on December 3, 1982.  The decision was

served on Respondent by letter from the Regional Hearing Clerk, dated

December 13, 1982, and received by Respondent on December 16, 1982.  On

January 4, 1983, within the 20-day period for filing a motion to reopen

the hearing allowed by the Rules of Practice (40 CFR 22.28), counsel

moved for an extension of time in which to file such a motion.  This

motion was granted and under date of January 19, 1983, Respondent filed

a motion to reopen the hiring.  After requesting and receiving two

extensions of time in which to respond, counsel for Complainant's

opposition to the motion was received on February 25, 1983.  Respondent

filed a reply brief under date of March 28, 1983, Complainant was permitted

to file a response on April 11, 1983, and Respondent was permitted to and

did file a final reply affidavit on May 3, 1983.

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                                     3



     The basic thrust of the motion is that evidence and scientific data



bearing on the analytical variability (standard deviation) of analyses



of PCBs in waste oil matrices, first made available subsequent to the



conclusion of the hearing (February 11,  1982), would preclude a finding



that the PCB concentration determined here (76 ppm) was in excess of the



then regulatory limit of 50 ppm.  In support of the motion, Respondent



has attached the affidavit of Mr. William J.  Ziegler, a chemist and



laboratory Manager for Stablex-Reutter,  Inc., a consulting and testing



firm.  Mr. Ziegler appeared as an expert witness for Respondent at the



hearing and testified, inter alia, that he was then engaged in a research



project involving analysis of PCBs in waste oils and that he would be



presenting a paper on that subject at the Pittsburgh Conference and



Exposition on Analytical Chemistry and Applied Spectroscopy to be held



the following month, March of 1982.  Assertions in Mr. Ziegler's affidavit



are based, in part, on this paper attached thereto.



     Alternatively, Respondent contends  that the hearing should be



reopened to allow evidence on the issue  of the civil penalty because it



believed that such evidence would be offered, if at all, only at a record



hearing after liability had first been determined.



     The substance of Mr. Ziegler's affidavit may be sunmarized as



stating that at the time the 50 ppm regulatory limit was established



there was no published and well recognized method for testing for PCBs



in waste oils at that concentration, that high concentrations of PCBs in



transformer fluids could be measured with a high degree of confidence



[in the accuracy of the test], but that  when waste oils, which present a

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                                     4

considerably more complex matrix than transformer fluids, are analyzed

at the [50] ppm level, the precision and accuracy of the method can

suffer significantly.  It is further asserted that the key to a laboratory

quality assurance program is the analysis of spiked and replicate samples

and the daily monitoring of accuracy and precision control charts,

outside of which the analysis is considered out of control, that the

measure of variability of data obtained at the 95 percent confidence

level is two standard deviations, that the relation of the mean result

obtained to the upper confidence level (UCL) and the threshold value (50

ppm) must be considered to determine if further analysis is warranted

and that if the mean result exceeds the threshold value and also the

UCL, then there is a considerable probability that the waste is not a

hazardous waste.  In such a case, further confirmatory and replicate

determinations are warranted to substantiate a result in excess of the

threshold value.  According to Mr. Ziegler, the EPA tests on Sample

No. 57970, which determined a PCB concentration of 76 ppm, from Noble

Oil Company present exactly this type of situation.

     Mr.  Ziegler's affidavit states that at the 95 percent confidence
                                             V
limit (level) the inter laboratory variability   for Stablex-Reutter for

50 ppm PCB in waste oil is +34 ppm, which implies that only a result- in
     I/   Although Mr. Ziegler states that it is the responsibility of
every laboratory to monitor the precision and accuracy of its methods to
define the degree and accuracy of intralaboratory variability, curiously
it is inter laboratory variability that is emphasized here.

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                                     5
excess of 84 ppm can be considered a violation of the 50 ppm limit in
the absence of numerous data on spiked and replicate samples, demonstrating
a lower variability.  If a laboratory does not have a program to monitor
intralaboratory variability, or cannot produce data on a method for a
given matrix, then data on interlaboratory variability must be considered,
even though the precision and accuracy of intralaboratory data should be
higher.  In this regard, Mr. Ziegler cites tvro recent studies, "Comparison
of Three Extraction Techniques for the Determination of Polychlorinated
Biphenyls," Exh II, authored by himself and three others, presented at
the mentioned Pittsburgh Conference, and "Data from Round Robin Study on
PCBs in Waste Oil," (1982), Exh III, by the National Bureau of Standards.
The former study shows that at the 50 ppm enforcement limit, using a 95
percent confidence level  (2 x standard deviation) an interlaboratory
variability of +67.7 percent exists using a modified EPA Method 608 and
Environmental Monitoring and Support laboratory  (EMSL, Cincinnati, Ohio)
Methods.  This result is asserted to mean that a PCB test result must be
greater than 84 ppm before it can be considered a statistically valid
violation of the 50 ppm enforcement limit.  Laboratories using the Hall
Electrolytic Conductivity Detector and the EMSL procedure had a much
lower variability than labs using an electron capture (EC) detector.
The National Bureau of Standards study involved 19 laboratories and also
involved PCBs in waste oil matrices.  For samples close to the 50 ppm
enforcement limit (41.0, 60.9, 41.0, 60.9, 41.0, 48.0 and 40.0 ppm)  a
mean standard ^deviation of 27.4 ppm was obtained.  This implies that at
the 95 percent confidence level a variability of +54.8 ppm exists at the

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                                     6



50 ppm PCB enforcement limit.  Using this data, a sample would have to



exceed 105 ppm before it could be considered to be statistically in



violation of the 50 ppm limit.



     Applying these data to the EPA test on Sample No. 57970 from Noble



Oil Company, Mr. Ziegler concludes that the sample result of 76 ppm is



neither statistically nor analytically in definitive violation of the 50



ppm PCB limit.  He points out that an EC detector was used for the



analysis, that EMSL procedure specifies a Hall over an EC detector



because of false positive or negative interferences that may result from



nonhalogenated materials in waste oils, that it was possible false positive



responses were observed in the EPA analysis and to demonstrate that this



was not the case, an internal standard and alternate column chromatography



should have been performed.  He further points out that no internal



standard was used by EPA in its analysis so that no positive identification



of chromatographic peaks as PCBs can be made, that EPA (EMSL)  procedure



specifies that at least 10 percent duplicate and 10 percent spiked



determinations be performed to ensure that the method is in control and



that no such data was provided by EPA to support the reported result on



Sample 57970.  Because no control charts have been provided to define



the intralaboratory variability of the EPA Edison, New Jersey laboratory



involved in the test of Sample 57970, Mr. Ziegler asserts that a statement



cannot be made as to the variability of the analysis and data on inter-



laboratory variability and precision must be used.  According to Mr. Ziegler,



the result of-76 ppm is not statistically in violation of the 50 ppm PCB



limit at the 95 percent confidence level using interlaboratory data and



EPA requirements in such a situation specify that additional sampling

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                                     7



and analysis is necessary because the UCL is greater than the threshold



value.



     Opposing the motion, counsel for Complainant has submitted the



affidavit of Mr. George M. Karras, the chemist who conducted the test on



Sample No. 57970.  In accordance with his testimony at the hearing and



as found in the initial decision, Mr. Karras used a silica gel cleanup



procedure to prepare the sample for the test.  This procedure is authorized



by EPA (Exh 8) and its purpose is to remove materials which might interfere



with the analysis.  The test was conducted using Method 608 (44 FR No. 233,



December 3, 1979, at 69501-09) beginning with Paragraph 11 (Exh 7).



     Mr.  Karras states that on January 27, 1982, he analyzed an aliquot



of Sample 57970, using the silica gel cleanup procedure and Method 608



beginning with Paragraph 11 as in the original test.  The analysis



resulted in a determination of 70 ppm PCBs.  He further states that at



the time of the mentioned analysis on January 27, 1982, he was conducting



a laboratory quality assurance program under which he analyzed a sample



of waste oil spiked with a known standard of PCBs.  He also prepared a



quality control chart, covering the period June 1981 through September



1982, to measure intralaboratory variability of the PCB analysis (Exh 2



of affidavit).  This indicates that intralaboratory variability in



January 1982 was from 74.6 to 127.4 percent at a 99 percent confidence



level.  Using the lower confidence [variability] level for the January 27,



1982, analysis of Sample 57970 produces a result of 52.44 ppm of PCBs



(70.3 ppm x 74"6 percent), which is above the 50 ppm enforcement limit.



     Responding specifically to assertions in Mr. Ziegler's affidavit



concerning the paper presented at the Pittsburgh Conference showing an

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                                     8



interlaboratory variability of PCBs at the 50 ppm threshold for Stablex-



Reutter of +67.7 percent at a 95 percent confidence level, Mr. Karras



points out that the EPA Region II laboratory did not participate in the



study and that the only appropriate measure of variability for the EPA



laboratory is his study on intralaboratory variability previously



mentioned.  Regarding the NBS study, the EPA Region II laboratory was



again not a participant.  Mr. Karras states that without having more



information as to the conduct of the NBS study he is unable to comment



thereon, specifically whether samples of waste oil analyzed were cleaned



prior to analysis, what cleanup procedures and gas chramatograph detectors



were used, and the training and experience of individuals conducting the



analysis.  He points out that data accumulated using several cleanup



procedures, multiple analytical procedures and performed by individuals



with varying degrees of experience can be expected to demonstrate a much



higher variability, than in a single laboratory using stringent quality



control procedures such as the EPA lab involved here.  It is asserted



that without such data, the results of the NBS study are not meaningful.



He emphasizes that Mr. Ziegler acknowledged that intralaboratory



variability data is much preferred to interlaboratory data.



     Respondent's brief and an additional affidavit of William J. Ziegler,



Laboratory Manager of Stablex-Reutter,  Inc.,  were received on March 31,



1983.  Mr. Ziegler points out that no evidence concerning the analysis



of Sample No. 57970 performed by Mr. Karras on January 27, 1982,  was



introduced at the hearing on this matter and that because Method 608



requires that all samples be extracted within seven days and completely

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                                     9
analyzed within 30 days of collection, the January 1982 test may not be
regarded as a valid replicate determination  (11 4).  It is asserted that
the control chart submitted as Exhibit 2 of Mr. Karras1 affidavit covers
the period June 28, 1981, through September 25, 1982, and is not appli-
cable to the July 22, 1980 test involved here  (1[  8) .  Moreover, in the
absence of data on the matrix used, the chart is  of little value because
there is a much lower degree of variability in analysis of a water
sample than in a more complex matrix such as a waste oil.  The affidavit
states that quality assurance data in the form of duplicate determinations,
spiked analyses, control charts, internal standards, analysis of field
blanks, reagent blanks or alternate column chromatography were not
provided to support the July 1980 analysis and that in the absence
thereof, inter laboratory variability at the 50 ppm limit must be
considered (11 5).
     Mr. Ziegler states flatly that Mr. Karras has failed to demonstrate
that his analysis was in control using the required protocol for PCB analy-
sis set forth in listed EPA publications including Method 608, and  EPA-EMSL
The Analysis of Polychlorinated Biphenyls in Transformer Fluid and Waste
                    y
Oils, June 24, 1980.   He further states that sections on chromatographic
     2_/   Respondent's Exh 5.  II 10.6.2 of the cited procedure provides:
               "10.6.2  If individual retention time varies by more
               than 10% over an eight-hour period or does not fall
             " within 10% of an established norm, the system is "out
               of control."  The source of retention data variation
               must be corrected before acceptable data can be
               generated."

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                                     10



operating cx>nditions call for the lose of an internal standard of p,p'-DDE



in every sample and standard for proper identification of PCBs and to



prove that the gas cnranatograph is functioning properly.  He raises



doubts as to the value of the control chart in supporting the accuracy



of the EPA test, saying that it is not clear whether waste oils were



used as the matrices or whether the tests were conducted at the 50 ppm



regulatory limit (II 8-10).  Replicate determinations were allegedly not



performed nor were replicate control charts provided for any period of



time, pertinent to the initial analysis of Sample 57970, demonstrating



the precision of the EPA Region II laboratory in PCB analysis of waste



oils (11 11 & 13).  Laboratory and field replicate data and data on the



analyses of fortified samples were not reported as required by 1[ 12.2 of



EPA Method 608  (11 14).



     Mr. Ziegler cites II 7.1 of EPA Method 608 specifying that each time



a set of samples is extracted or there is a change in reagents, a method



blank should be processed as a safeguard against chronic laboratory



contamination, asserts that EPA could not provide data that this was



accomplished for either the July 22, 1980 analysis or the January 27,



1982 analysis and asks rhetorically what guarantee is there that such



[laboratory]  contamination did not occur or that the sample containers



were free from contamination (11 12).  He also cites 44 FR No. 233,



December 3, 1979, at 69553 as requiring analysis of a field blank and



states that this protocol was not followed by EPA in the case of Sample



No. 57970.   Absent analysis of a field blank or documentation that



sample containers were cleaned as specified in Section 3 of EPA Method

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                                      n

 608, there is, according to Mr.  Ziegler,  no evidence to prove that the

 container has not been contaminated (1|  13). Mr.  Ziegler complains that

 the single calibration run by the EPA laboratory  is  not in accordance

 with II 6.1 of Method 608 requiring  that calibration  standards be prepared

 covering two or more orders of magnitude  that will completely bracket

 the working range of the chromatographic  system (11 15).  The lack  of

 such calibration standards allegedly makes  the  result (quantitation)

 obtained on Sample 57970 highly  questionable.

     Mr. Ziegler maintains that  the use of  an internal  standard of p,p'~
                                                              V
 DDE is a matter of routine, citing  II  11 of  the  EMSL  procedure,   and

 not an option, but must be followed because it  is the only way to  certify

 that the gas chromatograph is functioning properly and positively  identify

 the presence of PCBs without bias or error  from small deviations in

 absolute retention times (II 16).  It is emphasized that identification

 of PCBs (Aroclor) is based on relative  and  not  absolute retention

 times, that an internal standard is essential for the very identity of

 PCBs in a complex matrix such as waste oil  and  that  absent an internal

 standard, Mr. Karras1 opinion that  the peaks matched Aroclor 1260  is

 totally arbitrary.  Mr. Ziegler  says that the data provided in his study

 and the NBS study are the first  studies on  analytical variability  of PCB

 analysis of waste oils at the 50 ppm limit  (11 17).   He asserts that EPA

 procedures were being used by laboratories, known to be competent  in PCB
     3/   EMSL procedure at the time of the initial test on Sample
No. 57970 was a draft "The Analysis of Polychlorinated Biphenyls In
Transformer Fluid and Waste Oils," dated June 24, 1980 (note 2 supra),
which has now been finalized "The Determination of Polychlorinated
Biphenyls in Transformer Fluid and Waste Oils," EPA-600/4-81-045
(Exh 3 to Karras affidavit of February 18, 1983).

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                                     12



analysis, involved in the studies and that unless EPA can demonstrate



intralaboratory variability for PCBs at the 50 ppm limit, it is valid to



use his data and NBS data to evaluate the statistical significance of



results obtained on Sample 57970.  In fact, he argues that there is no



choice but to use "round robin" data in evaluating evidence in this



matter.



     Examining chromatograms of tests 'conducted by the EPA laboratory on



January 27, 1982, submitted with Mr. Karras1 affidavit of February 18,



1983, Mr. Ziegler alludes to inconsistencies, which he contends raise



similar questions as to the July 22, 1980 analysis (11 18).  He notes



that the chromatogram (Exh 1 of the Karras affidavit) reflects that a



one milliliter sample size was used and that Mr. Karras testified at the



hearing that a one milliliter sample size was also vised in the July 1980



analysis (1[ 19).  He points out that the EMSL procedure  (June 24, 1980)



specifies that the aliquot must be accurately weighed and states that it



is impossible to accurately pipet a one milliliter aliquot of a viscous



waste oil.  He refers to 11 7.2 (7.2.2 of the April '81 procedure) which



specifies that the size of the aliquot taken must be determined within



+0.001 grams, asserting that failure to do this would add an additional



error that could be as high as +20 percent in addition to the normal



variability of the test method when performed in a proper manner.



According to Mr. Ziegler, this means that if normal variability is +25.4



percent, total variability could be as high as 45.4 percent, which would



extend the EPA Region II determination at the 95 percent confidence



level to 40 ppm, below the TSCA limit.

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                                      13

     Mr.  Ziegler refers  to markings on the chromatograms  submitted with

Mr. Karras1 affidavit, which he contends  indicate  that the calculations

shown  thereon could be off by  a factor of 100  so that the result of 70.3

ppm PCB should be  0.703  ppm  (II 20).   This is because  the  markings appear

to indicate that a one milliliter  aliquot of oil was  diluted to 100

milliliters, which dilution .was not recognized in  the calculations.

     Responding to these contentions,  Complainant, while  acknowledging

that 11 8.3 of Method 608 requires  that all  samples must be extracted

within seven days  and completely analyzed within 30 days  of collection,
                                                                        I/
contends that Mr.  Ziegler misrepresents the purpose of this requirement.

It is asserted that the  Method was originally  developed for the analysis

of wastewater samples, that  the purpose of the 30-day requirement is to

prevent degradation of the samples and that the re-analysis of Sample

57970 on January 27, 1982, 500 days after it was collected, in no way

prejudiced Respondent because  if the extended  holding period had any

effect at all, it was to Noble's advantage in  that the concentration of

PCBs in the sample was understated (Id. at 8,  9).  Mr.  Ziegler is of the

opinion that degradation of PCBs is unlikely because  of their high stability/

agrees that extended holding times may understate  the level of PCBs, but

says that extended holding times may also overstate the level of PCBs, due
                                                        v
to volatilization of the lighter hydrocarbon fractions.    It is emphasized
     47   Response of April 11, 1983, at 7.  This argument appears
inconsistent with the contention  (at 16, infra) that extraction is
applicable only to water samples.  Paragraph C.2. of the Silica Gel
Cleanup Procedure (EPA Exh 8), which is clearly applicable to oil samples,
significantly refers to Method 608, 44 FR No. 233, December 3, 1979,
69501-09, in its entirety, rather than just selected portions thereof.

     5/   Affidavit, dated May 2, 1983, at 2.  The Webb and McCall
article cited in the EMSL procedure, Quantitative PCB Standards for
Electron Capture Gas Chromatography  (Journal of Chromatographic Science,
Vol. 11, July 1973, at 366), states that chromatograms of PCBs usually
show some evidence of degradation or metabolism (Id. at 369).  While
this is understandable, if, for example, the sample is animal tissue, it
is not clear that this applies to waste oils.

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                                     14

 that Mr. Karras testified at the hearing that in analyzing Sample

 No.  57970, he used Method 608 beginning at II 11 (Tr. 178).

     The fact that Mr. Karras did not use an internal standard in the

 analysis of Sample No. 57970 on July 22, 1980 was elicited in cross-

 examination of Mr. Karras at the hearing (Tr. 196).  Disputing Mr. Ziegler's

 assertion that an internal standard is required on every sample for

 proper identification of PCBs, Complainant cites 11 11.5 of the EMSL

 procedure (EPA-600/4-81-045, note 3, supra) and contends that an internal

 standard is required only when the source of Aroclors or PCBs is not

 apparent.  The first sentence of the cited paragraph provides "If the

 parent Aroclors or source of PCBs is not apparent, calculate the concen-

 tration according to the procedure of Webb and McCall." (note 5, supra).

 The  identical statement appears in 11 11.4 of the draft procedure.

 According to Mr. Karras, the Webb and McCall procedure uses an internal
         i/
 standard,   but an internal standard was inappropriate in his analysis

 of Sample No. 57970 on July 22, 1980 and January 27, 1982, because he

 was  able to identify the source of the peaks as Aroclor 1260 (Affidavit

 at 11 7).

     Complainant points out that the quotation relied upon by Mr. Ziegler

 in 11 16 of his affidavit relative to analysis of standard mixtures of
     6_/   The Webb and McCall article (note 5, supra) provides that the
 [QC] peaks are identified by their retention times relative to p,p'-DDE
and recommends that this be adopted as a standard method for designating
individual PCB GC peaks.  Mr. Ziegler testified that p,p'-DDE was a
pesticide residue and that "you add that internal standard and you
quantify your retention times, which is a measure of identity when the
peaks come out on the GC trace.  You use the standards as a relative
standard to when the materials are coming out and that is how you make
your identification of PCB's" (Tr. 289).  According to Mr. Ziegler, this
was critical in electron capture analysis and additional quality control
is necessary to demonstrate that all  possible interferences had been
removed in the cleanup.

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                                      15

each Aroclor is contained in 11 11.4.2 of the draft version of the EMSL

procedure/ implying that a similar requirement is  not contained  in the

final version.  While this is incorrect as  11 11.5.2 of EPA 600/4-81-045

contains an identical requirement, Mr. Ziegler's position  appears to
                                                                    z/
overlook the alternative to use of p,p'-DDE as an  internal standard.

Mr. Ziegler expresses the opinion that he would not leave  it to  personal

judgment as to whether a sample chroitatogram sufficiently  resembles a

standard Aroclor, says that an internal standard is easy to use, that  data

interpretation without an internal standard is pure opinion, but that  data

interpretation based on relative retention  times is irrefutable  scientific

fact (Affidavit of May 2, 1983, at 17).

     Concerning Mr. Ziegler's statement that the EPA  control chart

(Exh 2 of Karras affidavit) does not  reflect the matrix used, Complainant

notes that 11 4 of the Karras affidavit clearly states that a sample of

waste oil was spiked with a known quantity  of  PCBs (Response at  10).

This, of course, falls short of a declaration  that waste oil was the

matrix involved in all tests on the chart.  The level of PCBs involved

in the spike is also not stated.  Mr. Ziegler's criticism  (11 12 of

affidavit) that EPA was unable to furnish data substantiating use of a

method blank as required by 11 7.1 of Method 608 is dismissed as being

based on a misrepresentation in that  the cited paragraph is applicable
     7/   Paragraph 11.4.2 of the EMSL draft  (11 11.5.2 of 60014-81-045)
provides in part:  "Determine the relative retention time (RET) of each
peak in the standards with respect to p,p'-DDE or assign the RRT shown
in the figures [ chromatograms of Aroclors, Figures 3, 5 and 6 in the
procedure] to the corresponding peak in the standard, (emphasis supplied)
Identify the RRT of each PCB in the sample by comparing the sample
chromatogram to the standard chromatograms."

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                                     16

to analysis of water samples, and provides in part:  "Each time a set of

samples is extracted * *."  Extraction is assertedly inapplicable to
                                                                   i/
analysis of oil samples which are prepared by dilution with hexane.

Answering, Mr. Ziegler declares that the method of preparation of the

sample has nothing to do with whether a method blank needs to be analyzed •

(Affidavit of May 2, 1983, at 5).  He cites II 10.5 of EPA/600-4-81-045,

providing -that each time a set of samples is analyzed or there is a

change in reagents, a laboratory reagent blank should be processed as

a safeguard against contamination, and alleges that a method blank is

always necessary to prove that a laboratory's reagents, glassware and

equipment are free from contamination.  Regarding Complainant's contention

that analysis of a field blank is only necessary in connection with EPA

Methods 624 and 625 (44 FR No. 223, December 3, 1979, at 69553), he

acknowledges that the cited reference (Appendix III) concerns detailed

quality assurance measures for priority pollutant analysis using GC/MS,

that Appendix I of the cited reference concerns QC methods for priority

pollutant analysis (Methods 601 thru 612) and asserts that the sampling

considerations in this section including the importance of a field blank

are applicable to Appendix I.  He maintains, however, that use of a field

blank is critical to prove that contamination has not occurred in the field

or that sample bottles used for collection of samples are free from con-

tamination and states that no other technique exists to guarantee

contamination free sample containers.
     8/   See note 4, supra.  Extraction can,  of course, simply mean
withdraw and in this sense it would not seem likely that a one percent
oil/hexane sample would be made without withdrawing oil from the initial
sample container.  Extraction can also imply a chemical process, which
appears to be a type of process described in 11 9 of Method 608 entitled
"Sample Extraction."

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                                     17

     Complainant attacks Mr. Ziegler's criticism of the calculations on

the chrtmatogram (Exh 1 to Karras affidavit) as being possibly off by a

factor of 100 as illustrating a profound lack of understanding of the

procedures used by Mr. Karras in testing the sample  (Complainant's

Response at 12).  It is pointed out that 11 C.2. "Sample Preparation" of

the Silica Gel Cleanup Procedure provides in part "Carefully transfer

1.0 ml of 1% oil sample to the column" and that Mr. Ziegler's apparent

assumption that 100 ml of the sample was passed through the column is
          i/
incorrect.    Mr. Ziegler denies any assumption that 100 ml of oil was

placed on the silica gel column, saying that this would definitely over-

load column capacity (Affidavit of May 2, 1983, at 6).  He states that a

common practice is to place one ml of oil on a column and elute this by

adding 100 ml of solvent, the entire eluent being collected.  He explains

that a common practice is to take the eluent and concentrate it, using

Kuderna-Danish glassware, back to the original sample size of one ml,

indicating that in the process sensitivity has been increased, and

interfering hydrocarbons have been removed.  He again refers to markings

on the chromatogram of the test conducted January 27, 1982, which clearly

state "1 ml sample to 100 ml, F.V. •= 1 ml" and emphasizes that "F.V. must

stand for final volume."  He asserts that if it does stand for final volume

there is definitely a factor of 100 error in the calculations.  He further
     9/   Paragraph 12.2 of Method 608 provides that results are to be
reported in micrograms per liter without correction for recovery data.
It is also noted that 11 7.2 EMSL procedure, draft and final version,
provides for dilution at the rate of 100:1 for samples [containing PCBs]
in the 0 to 100 mg/kg range.  Moreover, it is of interest that a completed
analysis report, dated July 1980, furnished in a prehearing exchange,
but not offered in evidence, reflects the value for Sample 57970 as
76000.0 ug/L PCB-1260.  The report indicates that this test was conducted
on July 16, 1980, while testimony at the hearing was to the effect that
the test relied upon was conducted on July 22, 1980 (Tr.  187, 192-93, 195).
It is not clear whether this is an error as to date or a different test.

-------
                                     18



asserts that if the "in-house" silica gel procedure was followed, there



is no need for the markings "F.V. = 1 ml" on the chromatogram and argues



that these markings raise legitimate and serious questions as to whether



Mr. Karras followed his method in detail.



     Mr. Ziegler avers that he was well aware that EPA Method 608 involved



wastewater samples, points out that the silica gel cleanup procedure used



by Mr. Karras appears to be an in-house and not a published method, and



that although this procedure involves waste oils, the chromatographic



method used (Method 608) applies to wastewater samples (Affidavit of



May 2, 1983 at 2-3).  He disclaims any implication that silica gel cleanup



of environmental samples is not an approved technique, noting there are



several silica gel cleanup techniques in EPA publications.  He notes that



Method 608 was used notwithstanding availability of the draft EMSL



procedure, dated June 24, 1980 (see notes 3 and 4, supra) and that this



enables Complainant to "pick and choose," omitting procedures considered



inconvenient, while nevertheless, contending approved procedures were



followed.  He contends that it is clear that appropriate methods and



quality assurance protocols were not adhered to in the analysis of Sample



57970.





                            Alternative Motion






     As indicated previously,  Respondent has moved in the alternative



that the hearing be reopened on the issue of the civil penalty,  the



basis for this* alternative is the contention that Respondent at all



times intended that there be a subsequent hearing on the penalty after

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                                     19



liability was first determined  (Memorandum of Law In Support of



Respondent's Motion to Reopen the Hearing, dated January 19, 1983, at



14).  In a footnote  (Id. at 15), Respondent argues that it is entitled



to  show that no useful purpose would be served by the imposition of a



civil penalty because:  "(1) Noble provides an important economical



alternative to disposal of waste oil by recycling that oil and permitting



its reuse by the people of New Jersey and  elsewhere;  (2) there is no



indication or allegation that Noble knew or should have reasonably known



in the course of its purchase of waste oil from various dealers through-



out the state that PCBs may have been present in the oil;  (3) Noble at



all times fully cooperated with the EPA even though it had good cause to



believe that EPA's sampling and analysis were scientifically invalid;



and (4) the imposition of a civil penalty would be a uniquely punitive



action without any possible purpose of deterrence."  Presumably, evidence



bearing on the listed matters would be offered if the motion was granted.



     Opposing the alternative motion, Complainant asserts that there is



no basis for Respondent's bifurcated hearing theory and points out that



the complaint, dated January 24, 1981, informed Respondent that it could



request a formal hearing to, inter alia, "contest the appropriateness of



the amount of the proposed penalty." It is further pointed out that



Rule 22.27(a) of the Rules of Practice (40 CFR Part 22) provides in part



that the initial decision shall include a  "recommended civil penalty



assessment, if appropriate."  (Memorandum In Opposition to Respondent's



Motion to Reopen the Hearing, dated February 22, 1983, at 22-23).



Additionally, the prehearing correspondence between the ALJ and prior

-------
                                     20

counsel for Respondent cited at 13-14 of the initial decision, and the

Trial Memorandum, dated January 21, 1982, wherein it is argued at 17-18

that the imposition of any penalty would be inappropriate* are cited to

refute any suggestion that Respondent did not understand that the hearing

included the issue of an appropriate penalty, if liability was found

(Opposition at 23-24).  Complainant also points out that in a similar

PCB enforcement proceeding under the Toxic Substances Control Act (Oil

Recovery Company, Inc., Docket No. II-TSCA-PCB-81-0106) the hearing of

which was held seven months prior to the instant hearing, and wherein

counsel for Respondent herein represented respondent in that case, the

issue of whether liability and the amount of the penalty would be

considered in a single hearing was specifically considered and resolved

in the affirmative (Memorandum in Response to Respondent's Reply Brief,

dated April 11, 1983, at 15-17).


                                Discussion


     Rule 22.28 of the Rules of Practice  (40 CFR Part 22) entitled

"Motion to reopen a hearing" provides in pertinent part:

          " (a) Filing and content.  A motion to reopen a hearing
          to take further evidence must be made no later than
          twenty  (20) days after service of the initial decision
          on the parties and shall  (1) state the specific
          ground upon which relief is sought,  (2) state briefly
          the nature and purpose of the evidence to be adduced,
          (3) show that such evidence is not cumulative, and
          (4) show good cause why such evidence was not adduced
          at the hearing.  The motion shall be made to the
          Presiding Officer and filed with the Regional Hearing
          Clerk."

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                                     21

     Complainant says that the quoted rule  appears  to be patterned after

 and to serve the same purpose as Rule 59 (a), Federal Rules Civil Procedures

 "New Trials;  Amendment of Judgments"  (Opposition at 8).  It is

 argued that new trials are not favored and  that the grant of a new trial

 in non-jury cases is limited to situations  where  there has been a manifest

 error of law or mistake of fact, citing Wright  &  Miller, Federal Practice

 and Procedure, Civil § 2804  (1973).  The affidavit  of Attorney Alan G.

 Kelley in support of the motion to reopen acknowledges that the Ziegler

 data on analytical variability (standard deviation) of PCB analysis was

 first made available after the hearing in this  case and makes it clear

 that the basic thrust of the motion is that the interests of justice

 require that the hearing be reopened (Id. at II  5  &  6).  A motion under

 FRCP Rule 59 upon the ground that  the interests of  justice require a new

 trial is at odds with the policy that there be  an end to litigation and

 thus will be granted only in unusual or extreme situations.  This would

 seem to be especially true of the  after occurring events or after acquired
                   10/
 data involved here.     As counsel points out,  however, Mr. Ziegler
     10/  EPA quotes the following from State of Washington v. United
States, 214 F. 2d 33 (9th Cir. 1954):

          "The policy of Law in having an end to
          litigation would in most cases prevent
          the reopening of a case because of after-
          occurring events  [citation omitted]

          But," a general exception exists where
          substantial justice requires a reopening
          and when the after-occurring event is of
          major importance in its impact on the case."
          214 F. 2d at 46-47.

This, of course, clearly indicates that an after-occurring event having a
major impact on the decision, may be a ground for a new trial in the federal
courts.

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                                     22

testified at the hearing that he was evaluating the variability of the

50 ppm TSCA limit and would be presenting a paper on that subject at the

Pittsburgh Conference on Analytical Chemistry in March of that year

 (Tr. 227, 256).  Evidence is lacking as to the status of that research

at the time of the hearing herein.

     Complainant contends that Respondent has failed to identify the

specific grounds for its motion, that Mr. Ziegler is making essentially

the same points questioning the EPA test procedure in his affidavit as

he did in his testimony at the hearing and thus Respondent has failed to

show that the evidence proposed to be adduced is not cumulative and

lastly, that Respondent has failed to show good cause why the evidence

was not adduced at the hearing (Opposition at 13-14).  Pointing to the

uncertain status of Mr. Ziegler's research paper at the time of the

hearing, Complainant asserts that Mr. Ziegler could have testified as to

the results of his research or Respondent could have requested an

adjournment to enable further testimony after the paper had been completed

and presented at the Pittsburgh Conference.

     Replying, Respondent argues that the FRCP and cases decided there-

under are inapplicable, that its motion is clearly permitted by the

Rules of Practice, that there is no reason for these rules to be applied

in a rigid, talismanic fashion, that its motion complies with the minimum
                          IV
requirements of Rule 22.28    and that fundamental fairness requires
     IV  Mthbugh most of the cases cited by Respondent involve rulemaking
under the APA, Trujillo v. General Electric Co.,  621 F.  2d 1084 (10th Cir.,
1980) & Duval Corp. v. Donovan, 650 F. 2d 1051 (9th Cir., 1981) involve
adjudication and stand for the proposition that administrative bodies have
inherent authority to reconsider their decisions  and that an agency's action
on a petition for reconsideration is discretionary.

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                                     23

that the hearing be reopened, in that the previously unavailable

statistical evidence sought to be introduced has a profound impact on

the reliability of the EPA test and upon the threshold question of

Respondent's liability for the alleged violation (Reply Brief at 4-10).

Respondent also disputes Complainant's contention that the control chart  -

showing intralaboratory variability furnished with the Karras affidavit

of February 18, 1983, establishes that the interlaboratory data supplied

by Mr. Ziegler is inapplicable (Reply Brief at 11, et seq.).  Respondent

argues that it should be permitted to cross-examine Mr. Karras as to why

this chart, which allegedly was in existence at the time of the hearing,
                                         12/
was not produced or referred at the time.     It is pointed out that the

chart fails to indicate the matrix or the PCB spike level used in the

tests and that if, through cross-examination of Mr. Karras, these were

shown to be inappropriate, Complainant's argument that it has intra-

laboratory data, which is preferable to the interlaboratory data proffered

by Respondent, must fail  (Id. at 13).  Respondent further argues that

Complainant's submission of a control chart, allegedly made in conjunction

with the test on an aliquot of Sample No. 57970 approximately 18 months

after the sample was drawn, constitutes belated recognition of the

invalidity of the July 1980 analysis and that this invalidity cannot be

cured by a test made long after the 30-day period specified by Method
     12/  OnelDbvious and likely reason is that the test on an aliquot
of Sample No. 57970 conducted in January of 1982 was far beyond the
30-day requirement of H 8.3 of Method 608 (note 4, supra, and accompanying
text).  It is also noted that the final version of the EMSL procedure
(11 10) requires precision and accuracy data to be maintained after
January 1, 1982.

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                                     24
608  (Id. at 14-15).  Respondent reiterates its belief that two hearings
would occur as a reason for reopening the hearing on the issue of the
civil penalty (Id. at 19-20).
     Although Respondent may well be correct that administrative agencies
are not bound by rigid rules applicable to courts and, consequently, have
more discretion in acting upon petitions for reconsideration or motions
to reopen the record, it is nevertheless fundamental that motions to
                                                iy
reopen the record should not lightly be granted.     Here it is obvious
that the principal original basis for the motion, i.e., that evidence
bearing on the analytical variability (standard deviation) of analyses
of PCBs in waste oil matrices, first made available after the conclusion
of the hearing,  would preclude a finding that the PCB concentration of
76 ppm determined herein was in excess of the regulatory limit of 50
ppm, has been broadened into a full scale attack on the validity of
Complainant's conduct of the analysis in question.  This is no doubt due,
at least in part, to data, a control chart and an analysis of Sample
57970 conducted on January 27, 1982, supplied in opposition to the
motion, .which were apparently available at the time of the hearing
(February 9-11,  1982), but not referenced or offered in evidence.  If
this data were essential to support the finding of 76 ppm PCBs upon
which the finding of violation is based, it is clear that the motion
would, of necessity, be granted, because Respondent had no opportunity
to question such data through cross-examination or otherwise at the
hearing.
     13/  This is not only because of the expense and inconvenience of
hearings, but also because the prevailing party should not be subjected
to the risk of having a favorable decision overturned in the absence of
substantial reasons.

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                                     25

     It is concluded, however, that quality control data and evidence

concerning the analysis of Sample 57970 conducted on January 27, 1982,

are not essential to support the finding of 76 ppm PCBs.  This is

because Mr. Karras, the analyst who conducted the July 1980 test, testified

that he ran a known standard of PCBs and compared the resulting chromato-

gram with previous chromatograms to assure that the chromatograph was in

good working order (Tr. 196-97).  This coupled with the testimony that

he used the Silica Gel Cleanup Procedure (Government Exh 8) in preparing

the sample and ran the analysis in accordance with 11 11 of Method 608

(Government Exh 7) is sufficient to support the validity of the analysis
                                                                     14/
as against other evidence in the record tending to detract therefrom.

For the question is not whether detailed testimony or documents in

evidence establish, for example, that the sample containers were free of

contamination, that cleanup procedures were properly followed and substances

which might interfere with the identification of PCBs removed, that the

sample aliquots of oil were properly measured or weighed and diluted

with the appropriate amount of hexane, which dilution was properly

recognized in the calculation of PCB levels or quantities and PCB peaks

properly identified,  but rather, whether there is sufficient evidence in

the record of deficiencies in the foregoing or other respects of the
     14/  That evidence was detailed in the initial decision and need
not be repeated here.  Regarding Mr. Ziegler's preference for a Hall
electrolytic conductivity detector rather than the GC electron capture
detector used here, because the former is halogen specific and will not
respond to interferences, Complainant points out that both the draft and
final EMSL procedure recognize that other semi-specific detectors such
as BCD may be used where sample chromatographic peaks closely match those
of the standards and provided proper cleanup procedures are followed.

-------
                                     26

 test as to cast substantial doubt upon the validity of the conclusion

 that the level of PCBs in Sample 57970, and thus in Tank No. 4, was in

 excess of 50 ppm.  The point being that Mr. Karras could have been

 cross-examined on all of these matters and the significance of any

 deficiencies thus revealed supported by the testimony of Respondent's

 expert, which might have afforded a more substantial basis for Respondent's

 contention that the test was scientifically inadequate.

     As noted earlier, the fact that Mr. Karras did not use an internal

 standard in the analysis of Sample 57970 in July of 1980 was elicited in

 cross-examination at the hearing.  Although Mr. Ziegler is critical of

 the failure to utilize an internal standard, contending that this places

 too much confidence in the personal judgment of the analyst, identifying

 RRTs of PCBs in the sample by comparing the sample chromatogram to

 standard chromatograms is sanctioned by the J34SL procedure (note 7, supra,

 and accompanying text).

     The foregoing demonstrates that Respondent's attack on the validity

 of the analysis of Sample 57970 is largely cumulative of matters which

 were either specifically raised or by necessary implication inherent in

 issues considered in the initial decision and cannot support a motion to
                  15/
 reopen the record.     This includes Mr. Ziegler"s complaints that data

 concerning quality assurance measures have not been furnished, that no

 evidence of analyses of field and method blanks to assure contamination
     15/  Whatever may be the proper construction of the 40 CFR 22.28,
it would seem to be clear that the rule is not intended to and cannot
serve as a vehicle for correcting errors in strategy or oversights of
counsel at the hearing.  If it was otherwise, the concept of finality
would have no meaning.

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                                     27

free sample containers and instruments have been provided, that his

concerns about a possible error by a factor of 100 in the calculation of
                                 16/
PCB levels have not been answered    and that the method of sanple

preparation has not been documented so as to establish that an accurate

aliquot of oil was measured or weighed.

     Concerning the principal basis of the motion, there is, of course,

nothing new or startling about the concept of analytical variability

(standard deviation) of analyses of PCBs or other substances for that

matter.  For example, the Vfebb and McCall article (note 5, supra) contains

data on the relative standard deviation of analyses of various Aroclors,

calculated as a percentage of the mean of the results.  Similar or

identical data is contained in the draft EMSL procedure, dated June 24,

1980, and the final version, EPA-600/4-81-045.  Paragraph 13.1 of Method

608 states that EMSL is in the process of conducting an interlaboratory

method study to determine the accuracy and precision of this test

procedure.  Moreover, Mr. Ziegler was questioned on this precise point

during the hearing and he replied that the precision of the test depended

not only upon how the test was run, but upon the matrix being analyzed

(Tr. 259).  He indicated that the variability of analyses of PCBs in water

samples was less than that of an oil or hydrocarbon sample and that his

laboratory liked to keep the relative standard deviation at better (less)

than a plus or minus 20 percent difference.
     16/  This concern results from calculations on the chromatogram of
Sample 57970, which was run on January 27, 1982.  As noted, supra at 25,
this chromatogram is not essential to support the finding of 76 ppm PCBs.

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                                     28

     Accordingly, the only new evidence offered in support of the motion

is data on inter laboratory variability, which has not been established

as applicable to an analysis conducted on July 1980 by a laboratory not

participating in the 1982 studies which generated the data.  Accordingly,

even if this inter laboratory variability data were admitted into evidence,
                                    17/
it is unlikely to change the result.     Respondent is relying on the

interests of justice and fundamental fairness to support the notion, and

a requirement that the preferred evidence be likely to change the result

seems reasonable.

     Respecting the alternative basis of the notion, Respondent has

offered no explanation for its asserted belief that the issue of the

penalty would be considered at a second hearing only after liability was

determined in the first instance.  Indeed, in view of the complaint, the

rules of practice and the prehearing correspondence cited in the initial

decision, it would appear that no reasonable basis for such a belief

could exist.  Moreover, as Complainant points out, Respondent's silence

at the hearing as to any possible second hearing where the issue of

penalty would be considered, militates strongly against the existence of
     IT/  As found in the initial decision,  duplicate samples from each
of the tanks were left with Respondent at the time of the inspection
on July 15, 1980.  Respondent's silence as to the disposition of these
samples and the results of any analyses conducted thereon, could afford
the basis for an inference that such evidence would be adverse to
Respondent.

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                                     29

such a belief at the time.  If the amount of the penalty is unduly
                                                                     18/
burdensome, Respondent would not appear to be totally without remedy.


                                          19/
                                Conclusion
                                               20/
     The motion to reopen the record is denied.
     Dated this / (s~  day of May 1983.
                                        Spencer T. Nissen
                                        Administrative Law Judge
     18/  Although the Federal Claims Collection Act of 1966 (31 U.S.C.
951-53)  provides for a limit on authority of the head of an agency to
conpromise claims to those that do not exceed $20,000, it also provides
that the Act is not intended to diminish authority to settle or compromise
claims and the agency would appear to have inherent authority to enter into
an agreement for payment in installments or to otherwise compromise the
claim based on economic hardship.

     19/  Respondent's request for oral argument on the motion is denied.

     20/  In accordance with 40 CFR 22.28(b), the filing of the motion
operated to stay the running of the 20-day appeal period provided by
40 CFR 22.30(a).

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23

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         UNITED STATES  ENVIRONMENTAL  PROTECTION  AGENCY  '«•


                   BEFORE THE ADMINISTRATOR
 In the Matter of               )
                               )
     Finch F-uel Oil Company,   )   Docket  No.  II  TSCA-PCB-82-
                               )   0104
                 Respondent    )
     Toxic Substances Control Act_- PCBs - A distributor who
     purchases waste oil  which ha"H been diluted so as to
     reduce the concentration of PCBs below 50 ppm, does not
     violate the PCB rule,  unless he knows or has reason to
     know that the oil  had  been diluted.

     Toxic Substances Control Act - PCBs - Complaint  against
     distributor of waste oil dismissed where facts do not
     show that oil  purchased by the distributor was the same
     oil  that had been  tested six days^before the.distributor
     had  made his purchase,  and had been found  to contain
     over 50 ppm PCBs.
Ap pea ranees:
              Gregory  T.  Halpert,  United  States  Environmental
              Protection  Agency,  Region  II,  New  Yor,  New  York,
              for Complai nant.

              Victor F. DeVito,  591  Summit*  Avenue,  Jersey City,
              New Jersey, for  Respondent.

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                        INITIAL  DECISION
      This is a proceeding under the Toxic  Substances  Control
                                   «
 Act  ("TSCA"), Section 16(a), 15 U.S.C.  2615(a),  for the

 assessment of civil penalties for violation  of the rule

 entitled "Polychlorinated biphenyls (PCBs) Manufacturing,

 Processing, Distribution in Commerce, and Use Prohibitions"

 (hereafter "PCB rule"), 40 CFR Part 761.I/   The  proceeding was

 instituted by a complaint issued on June 1,  1982, charging

 that Respondent Finch Oil Company had distributed in  commerce

 oil containing  PCBs in excess of 50 parts per million ("ppm")

 in violation of 40 CFR 761.30(c).   A penalty of  $20,000 was

 requested.   Respondent answered  and denied the charges and

 also put in issue the appropriateness of the amount of the
                           *.
 proposed penalty.   A hearing was  held  in Newark,  New Jersey .

 on November 30,  1982.   Following  the hearing the parties  sub-
                                                           \
mitted briefs on  the legal  and factual  issues.   On consider-

ation of the  entire record  and the  submissions  of the

parties, the  complaint is dismissed.   All  proposed findings
!_/   TSCA,  Section  16(a)  provides  in  pertinent part as follows:
          (a)  Ci vi1 -  (1)  Any  person  who  violates a provision  of
     section  15  shall  be  liable  to  the  United States for a civil
     penalty  in  an  amount  not  to exceed $25,000 for each such
     violation.   Each  day  such a violation continues shall,  for
    .purposes  of  this  subsecti on ,'const i tute^ a separate
     violation of section  15.
           - •*
     Section  15  of  the Act provides in  pertinent part, "[i}t  shall
     be  unlawful  for any person to  -  (1)  fail  or refuse  to comply
     with  . .  .  (C)  any rule promulgated  .  .  . under Section  .  . .
     6  . .  .  ."   The PCB rule was promulgated  under TSCA,  Section  6(e),
     15  U.S.C. 2605(e).

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 of  fact  inconsistent with this decision  are  rejected.



                        Findings  of  Fa^t



 1.    Respondent Clarence P. Finch II is  engaged  in  the busi-



 ness.of  selling heating fuel oiVto commercial  customers.  He



 began  his business, known as Finch  Fuel  Oil  Company,  in



 1975,  and.operates out  of his home  in Kearny,  New Jersey. "•



 He  maintains and has no fuel oil storage facilites.   Transcript



 ("Tr."J  127, 130-31.



 2.    Finch purchases the fuel  oil he sells primarily  from the



 major  oil companies.  On occasion_he also buys waste  oil  from



 other  sources which he blends  with the fuel  oil.  Tr.  14,  130..



 3.   For several  years Finch has purchased waste oil  from  the



 Summit Metal  Company of Jersey City, New Jersey.  Tr.  153-56.



 4.   Summit  salvages  scrap  metal  that  it. obtains from  various



 sources but  primarily from  transformers  and other electrical



 equipment.   Tr.  108-09.



 5.   Summit  drains  waste dielectric  oil  from transformers  and



 other electrical  equipment  it  purchases  and stores  the oil



 in two tanks,  one  having a  capacity  of -about  800 gallons and



 the  other a  capacity  of  about  1,200  gallons.   Waste  oil



 collected from  other  sources such as diesel  fuel  and crankcase



 oil  from  scrapped trucks or  motors was also  stored  in  these



 tanks.   Tr.  110,  112,  124.



 6.   On April 15, 1981,  EPA  employees conducted an  inspection



of Summit to determine compliance with PCB  regulations.  In

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 the course  of  that  inspection,  samples  of  waste oil  were
                                *
 collected  from each  tank.  Sample  57858  was collected from

 the 1,200  gall on .capacity .tank  which .at  that  time contained.

 about  600  gallons of  waste  oil.   Sample  57859 was collected

.from the 800 gall on., tank-whi ch  contained about.. 100 gallons

 of  waste oil.   Tr. 8, 11;  Government's  Exhibits 1, 2.

 7.  ( Both samples were taken to the EPA  Multidiscipiinary

 Laboratory  in  Edison, New Jersey, where  they  were  analyzed

 for the presence of PCBs.  Sample 57858, was  found to contain

 PCBs at a level of 140 ppm, and sample 57859  was  found  to

 contain PCBs at a level  of 2,400 ppm.   Tr.  24-25,  67, 86-87;

 Government Exhibits  3-5.

 8.   On April 21, 1981,  Finch purchase^ 2;6DO gallons of  waste

oil  from Summit.  This oil  was  pumped  from the two waste  oil

storage tanks described  above.   Summit had added waste oil

to the  tanks since  April  15,  1981, bringing them to their

estimated 2,000 gallon capacity, and at  the time of delivery

to Finch supplemented  those  2,000  gallons by another  600

gallons obtained from transformers,  drums or other storage

containers  at Summit.  Tr.  Ill,  119, 129.

9.   Between April 15, 1981  and  April  21, 1981,  Summit probably

withdrew 50  to  60 gallons from the two tanks for use  in  its
         - ••*
portable heating equipment  and may have  given  away another 55

gallons  or  more to others.   Tr.  117-120.

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                  Discussion and Conclusions   .


      The crucial and indeed only question in this  case is

 whether the waste oil which Finch purchased "on April  21,  1981,

 contained PCBs at a concentration greater than 50  ppm.   If it

 did,  Finch's purchase of that oil and his subsequent  resale of

 it  was a distribution of PCBs in commerce in a non-totally

 enclosed manner in  violation of 40 CFR 761 . 20(c)..?_/   On the

 other hand,  if the  waste, oil contained less  than 50 ppm PCBs

 at  the time Finch purchased it, Finch would not have  violated

 the PCB rule.

     Complainant argues  that even if the waste oil  at  the  time

 it was purchased by  Finch  contained  less than 50 ppm  PCBs,

 Finch would  still  be in  v-iolation because dilution  is  expressly

 prohibited  by  40 CFR 761.l(b).!/ The prohibition  against di-

 lution was  explained in  the  preamble to  the  PCB rule as intended

 to prevent  the deliberate  dilution of concentrated  PCBs to  evade
2_/   .Finch  does  not  question  that  his  purchase  of waste oil
from Summit  for  resale to  Meadowview Hospital was distribution
in commerce.   In  view of the  broad  definitions  of the term
"commerce"  and "distribution  in commerce" in  TSCA,  Sections
3(3) and  (4),  15  U.S.C. 2602  (3) and (4), it  is  understand-
able why  he  has  not.  It is also clear that transporting the
waste oil by tank truck would not  be a distribution in a
"totally  enclosed manner"  within the meaning  of the PCB rule.
See 40 CFR  761.3(hh) and 761.20.

3/   Complainant's openi ng ..brief at 9, 21.  40 CFR  761.l(b)
provides  in  relevant part  that, "[a]ny chemical substances
and combination of substances that  contain less than  50 ppm
PCBs because of  any  dilution, shall be included as  PCB and
PCBs unless  otherwise specifically  provided."

-------
 the more stringent disposal  requirements that apply to  such
 liquids..!/  Thus, the .prohi bi t i on aga i nst. di 1 ut i on would  seem
 to apply to one who actually dilutes the PCBs, and to those
 who act  in concert with  him  for  the purpose of evading  the
 more stri nge/it- di sposal  requirements.'  Here there is no
 evidence that  Finch knew that the waste oil  in the tanks had
 been tested by. .the EPA  previ ously - and. had . been. fouVid t o con-
 tain PCBs  in concentrations  greater than 50 ppm.jj./  Assuming
 that Finch  knew  or should  have known  that some  or  all  of the •
 waste oil  came  from electrical transformers, it  would have
 been prudent if  not  obligatory for  him  to test what  the  PCB
 concentration  of the  oil was  at  the time, but testing would
 not  have disclosed  whether oil with  high  concentrations  of
 PCBs  had been  diluted by the  addition  of  oil  with  low concen-
 tration 'of  PCBs.   In short, Complainant's position would
 require  that liability be  impos.ed on  a  distributor like
 Finch, even if he  was blameless so  far as diluting the oil
 was  concerned,  and  had' purchased  the  oil  in  the good  faith
 47   See 44 Fed. Reg. 31518, 31521.
 J5/ "  Nor would Finch have been any more knowledgeable  about  the
."PCB content of Summit's oil, if he asked Mr. Brauer, the  owner
 of Summit.   Mr. Brauer was not told by the EPA of the  results
 of the EPA's tests until May 15, more than three weeks  after
 Finch had purchased the oil.  Tr. 12.  Brau-er himself  did  not "
 dp any testing" and the last previous test of Summit's  oil
 appears to,have been one done by the State of New Jersey  in
 January 1982.   Brauer was never informed whether the test
 disclosed any  PCBs.  Tr. 126.

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 belief, corroborated by his own test,  that the oil contained

 less than 50 ppm PCBs. Since under such a rule the distributor  -

 could never be sure that he was not  distributing diluted waste
                                  v
 oil, the effect would be to discourage *f not stop entirely

 the distribution x>f. all  .waste  oil  recovered  from electrical

 transformers regardless of  their PCB concentration,  a result

'which I find no support  for either in  the PCB rule or the

 preamble.   To the contrary, the preamble  to  the  PCB  rule

 expressly  states that  waste oils  that  contain  concentrations-

 of PCBs less than 50 ppm may be used as fuel  or,  indeed, for

 any purpose  except  as  a  sealant,  coating  or  dust  control

 agent.J5/   Complainant's  contention,  therefore, that  Finch

 should  be  found  in  violation of the  PCB rule  no  matter what  the

 concentrations  of the  PCBs  in the  oil  he  purchased is  rejected.

 While Finch's test  of  the waste oil was aot considered a reliable

 indicator  of  the  PCB content of the oil (see  Infra  at 7-8),  still

 the  record does  not establish that Finch knew or should  have known

 that the waste  oil  had been diluted.
                                                                  t
     For proof that the waste oil contained over 50 ppm  PCBs

 when Finch purchased it, the EPA relies on the undisputed fact

 that Finch was the only one  who purchased  waste oil from  Summit

 after the EPA's  inspection of Summit  on April 16, 1981.   To

 this, Finch offers the defense  that Complainant has not  shown
6/   See 44 Fed.  Reg.  31525.

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 that  the oil tested  on  April  16,  1981,  was  the same oil  that


 was  purchased by  Finch  on  April  21,  1981.


      One contention  made by  Finch'-in  its  defense  is that


 Summit  had only 700  gallons  in  its tanks  when  the EPA inspected


 Summit  on April  16th, while  Finch took  delivery of 2,600 .
                   r                         •           "   .

 gallons.  As Complainant points  out,  however,  e.ven if it be


 assumed that the additional  1,900 gallons were free of PCBs,


 the oil would still  contain  124 ppm  PCBs.^7/


      A  second contention made by Finch  is that he  had taken


 a  sample of oil  purchased  from Sumnrit which was tested and


 found to contain less than one ppm PCBs.  If liability in this


 case  turned on  which test was the more  reliable indicator


 of the PCB  content of the oil, the decision would  clearly be


 in favor of the  EPA's test.  The samples taken by  the EPA were


 collected  in  a  special  container, were carefully marked,  and


 records were  kept  accounting for them from the time of collection


 to the time  of testing.JJ/  The tests  themselves can be assumed


 to have been  done  in accordance  with  recognized procedures,


 since  there  is nothing in the record  to  the  contrary.  In
_?/   See Complainant's  opening  brief at 9.   The formula used

t"o calculate  the  PCB  content  of  the  2,600 gallons  is  as follows:

140(ppm) x  600(ga1.)  +  2,400(ppm)  x  100(gal.)= 124 ppm (for the ..

                  2,600 (gal.)7       '     2,600 gal.)


8/   Tr. 24-25, 39-40,  47-48, 83-84; Government's  Exhibits 1-5.

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                               8


 contrast,  Finch  took  his  sample  in  an  ordinary jar, not for

 the purpose  of  testing  for  P.CBs.  but in order to determine ;""

 whether  the  oil  had  dirt  in  it.   His only  record consisted

 of marking the  sample with  a  number -  in the case of the oil

 purchased on April 21,  it was  number 5 - and also marking

 the invoice  for  the  purchase  with the  same  sample number.

 The samples, all  of which were of waste oi 1 "purchased  from

 Summit were  then  kept at  Finch's  house.  He .had  them tested

 for PCBs after being  visited  by the EPA in  September 1981._9/

 While the tests  themselves appear to have been  done properly,

 the procedures followed by Finch offered no  reasonable  assur-
                    "•                     ^-
 ance either that  the  sample taken from one  purchased quantity

 of  oil could not  have been confused with a sample  from  some

 other purchased quantity, or that a sample could  not have

 been tampered with.

    ..Another reason for questioning the rel iabi1iiy  of  Finch's

 test as an indication of the PCB content of the oil  purchased

 on  April  21,  is that to reach the level of less than one  ppm,

 Summit would  have had to withdraw all  700  gallons of oil in  its
                                        ••
 tanks between April 15 and April  21.  According to  Mr.  Brauer's

 testimony it  is hi gly. -unl i kely that  oil in  such a -large .qua.nt.i ty

 was withdrawn.!O/                       .
£/  Tr. 131 ,  133, 140-41.
           . **                                     "
1 Q/  Mr. Brauer indicated  that  he  may  have  withdrawn 50 to 60
gallons for 'his own use", and  that  he may  have  given away one or
more 55 gallon  drums.   Tr.  1.15,  117, 119-120.

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      A  third contention  made  by  Finch,  cannot  so readily be

 dismissed.  This is that  Complainant has  not  really  established

 what  the  concentration of PCBs was  in the  waste  oil  purchased by
                                  %
 Finch because of the testimony by "Julius  Brauer,  the  owner  of

 Summit, th'at during the  period between  April  15  and  April  21,
                 /
 1981, he may have u.sed 50-60  gallons of waste  oil .for  his  outdoor

 heaters, and may have given away 55 gallons or more  of waste  oil,

 to people to whom he had regularly been giving waste oil for  use

 as fuel.  According to this evidence, a sufficient quantity of- -

 waste oil  could have been withdrawn from the tank with  the

 oil containing 2,400 ppm PCBs, to bring the level of concen-

 tration below 50 ppm PCBs, and Complainant's assumption that

 the violation would be established even if the other 1,900

 gallons were free of PCBs would not hold up.11/
                                   *
     Complainant argues that Brauer's testimony is too  specu-

 lative to  be given  any weight.  Brauer  testified on the basis

 of his recollection of what  may have occured 18 months  pre-

 viously and  produced no  written records.  Yet, the testimony

 cannot be  wholly discredited,  which is  what Complainant would
LL/
    Dr.  Gervitz  did testify that  it  was  impossible to drain a tank
completely.   Nevertheless,  it  would  be  necessa ry t o~ass ume that •
about 20 gallons remained  in the  tank  with the oil containing 2,400
ppm PCBs in  order  to bring  the level of  concentration of the 2,600
gallons  to  50 ppm.   Tr.  54.  There  is  simply  no basis for making
that asumption -on  this  record.  For  example,  if all  but 15 of th-e
100 gallons  containing  2,400 ppm  PCBs  were *wi thdrawn, the
concentration of the 2,600  gallons would  be 46 ppm.   Using
Complainant's formula (supra at 7 n. 9),  the  calculation
would be as  follows:

2,4DO-(ppm)  x 15 (gal .)  +  '140 (ppm)  x  600(gal) = 46(ppm)
                   2,600 gal.

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                               10
 like to  do.   It  is  not  surprising  that  Brauer kept no written
 records  of the  relatively  small  quantities of waste oil he used
 himself  or gave  away  to  others.  Nor,  cpntrary to what Complainant
 argues,  was  Brauer's  relationship  to  Finch such as to make it likely
 that it  was  in.  Br.auer's  self-interest to  testify in favor of Finch.
 Finch has beefi  only an  occasional  purchaser from Braver. 12/
 Complainant  argues that  Finch could assert  a  claim against Brauer
 if  Finch is  found liable and a penalty  is  assessed.Jjy  For all
 that appears in  the-record, however,  Finch  may have purchased from
 Summit at his own risk.  Compl ai narrt, certainly, has furnished no
 evidence as to the terms of sale to show the  contrary,  nor has  he
 explained what the legal basis for Brauer's liability  would
 be.   In short, there is nothing in  this record or  Brauer's
 testimony to indicate that'Mr.  Brauer was not  giving his
 honest recollection  of what may have happened  to some  of the
 waste oil sampled.by the EPA.
      It is,  of course, true that Brauer did not  unequivocally
 state that  waste oil  was in fact  withdrawn from his tanks  and
 only  gave rough  estimates of the  quantities that he was likely
to have used  or  given  away.  If  the testimony  is subject to
several different inferences,  however,  all  of  which appear to
be equally  possible, the  consequences  must  be' borne, by
Complainant -and  not  by Respondent.   Complainant's case rests
1 2J  Tr.  128,  1-53-5-6* •••F-i rich's - normal-sources  of oil  were the
maj oroilcompanies.   Tr.130.
13/  Complainant's  reply  brief  at  4.

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 on its  establishing  by  the  preponderance of evidence that
 Finch's  distribution  of PCBs  violated the PCB rule.1_4/ Finch
 being the only purchaser  from Summit does make a prima facie
 case in  that the reasonable inference to be drawn is that
 the  700  gallons sampled  by  the EPA on April  15,  were included
 in the  2,.600 gallons  purchased by  Finch on April 21. The
 burden which shifts to  Finch  by  the prima facie  case,  however,
 is the burden of coming  forward  with some credible  evidence
 to rebut this inference'.  The  burden  of  persuasion  does  not
 shift merely because Complainant for  its  case-in-chief has
 produced enough evidence to justify  a  finding  in its favor,
 if the evidence is  left unexplained  or  unrebutted.   Once
 Finch has come  forward with rebutting  evidence the  entire
 record must  be  evaluated_to determine  whether  Complainant has
 established  by  the  preponderance of the evidence that  Finch
 distributed  oil  containing PCBs at a concentration  greater  than
 50 ppm.J_5/   Here, Brauer's testimony has created too many gaps
 between  the  EPA's inspection of Summit on April  15, and
 Finch's  purchase on  April  21,  to draw the conclusion that Finch
 had purchased oil containing PCBs in excess of 50 ppm.   I
 /
 find, therefore, that  Complainant has not sustained its      '
 burden and that the  complaint  should be dismissed.
14/ 'See  40  CFR  22.24.
1 5/  Complainant argues  that  it  must  prevail  unless  Finch shows
tTTat all  700 gallons of  waste  oil  were  no  longer in  the tanks on
April  21.   Complainant's  opening brief  at  13-14.  This is
apparently  based on-its  argument that even  if the 2t600 gall ons
contained less than 50 ppm  PCBs, Finch  would  still  be  in violation
because of  the prohibition  against  di1ution,  which  argument  has
been rejected.  Supra at  6.              .                        .

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                               12
                             ORDER
      It  is  hereby ordered  that  the  complaint in this proceeding

 be di smi ssed.                                                  •
                        Gerald Harwood,  r~
                   Administrative Law Judge
 July 18, 1983
20/  Unless an appeal  is taken pursuant  to 40 CFR 22.30 or the
"Administrator elects to review this  decision on his own motion,
the Initial Decision shall  become  the final  order of the Admin-
istrator.   See 40 CFR  22.27(c).

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24

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                                                        <• •::•:-.: 22   ?3:  55
              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         BEFORE THE ADMINISTRATOR
In the Matter of

Niagara Transformer Corporation,     )   Docket No.  II  TSCA-PCB-81-0214

                    Respondent
Toxic Substances Control  Act -  PCBs  - Guidelines  for the  Assessment  of
Civil Penalties  - Under all  of  the circumstances  including  Respondent's
good faith and the probability  of harm,  PCB Penalty Policy  (45 FR  No.
177, September 10, 1980,  at  59770, et seq.) was determined  to be
inapplicable and proposed penalty for violations  of PCB rules calculated
in accordance therewith was  substantially  reduced.
Appearance for Respondent:
                        Edward  J.  Wagner,  Esq.
                        Saperston,  Day,  Lustig,  Gal lick,
                          Kirschner &  Gaglione,  P.C.,
                        Attorneys  at Law
                        Olean,  New York
Appearance for Complainant:
                        Gregory  T.  Halbert,  Esq.
                        Office of Regional Counsel
                        EPA,  Region II
                        New York, New York

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                             Initial  Decision


     This is a civil  penalty proceeding under section 16(a)  of the Toxic

Substances Control  Act (15 U.S.C.  2615(a)).   The  proceeding  was commenced

by the issuance of a  five-count complaint  by  the  Director, Enforcement

Division, EPA Region  II,  New York,  New York,  on August 7, 1981, charging

Respondent, Niagara Transformer Corporation,  with violations of the Act

and regulations concerning the  marking,  handling  and  storage of

polychlorinated biphenyls (PCBs)J/  A penalty totaling $50,000 was

proposed to be assessed against Respondent.   Respondent answered,  admitting

certain of the allegations and  denying others and contesting the

appropriateness of  the penalty.  A  hearing on this matter was  held in

Buffalo, New York  on  May  10, 1983.

     Based on the  entire  record including the briefs  and proposed  findings

and conclusions of  the parties,  I find that the following facts are

established:
     ]_/  Section  2614  of the Act  (15 U.S.C. 2614) provides in pertinent  part:

            "It shall  be unlawful for any person to -  (1) fail or refuse
          to comply with (A) any  rule promulgated or order issued under
         •section 4, (B) any requirement prescribed by section 5 or 6,
          or (C)  any rule  promulgated or order issued  under section 5 or
          6; -."
            . •*
         PCB rules were issued under section 6(e) (15  U.S.C.  2605(e)).

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                             Findings of Fact





1.   Niagara Transformer Corporation (formerly Erie Electric Company) has



     been in the business of manufacturing and repairing PCB transformers



     since 1948 (Tr. 110-11).  Manufacture of PCB transformers was



     discontinued in 1977 and repair of PCB transformers was discontinued



     in 1979.  Respondent's business is apparently now chiefly the



     manufacture and repair of mineral  oil transformers (Tr. 13).



2.   Respondent's President is Mr.  Fred Darby, who had no prior connection



     with the company,  but assumed  that position  upon the death of his  uncle



     in January 1979 (Tr. 154).   Mr. Darby relied o.n Herman Gabel, Executive



     Vice President and General  Manager,  to keep  him abreast of regulations



     and developments concerning the handling, storage and disposal  of  PCBs



     (Tr. 156).                                           '*'*-•



3.   Respondent maintains two facilities,  offices and manufacturing  or  repair



     operations at  1747 Dale Road and a storage and  repair facility  at



     1600 Seneca Street,  Buffalo, New York (Tr. 15,  16).



4.   On October 22, 1980, an inspection of Respondent's  facilities was  con-



     ducted by representatives of EPA,  Dr.  Arthur H.  Gevirtz and  Deborah



     Dalton (Tr. 13, 14).  Dr. Gevirtz  and Ms. Dalton  met  with  Mr. Gabel,  and

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     Mr. Darby.   The visit  was  unannounced and officials  of  Respondent  had


     no advance  knowledge of the inspection  (Tr. 41, 43,  112, 141).


 5.  Upon inquiry by the EPA representatives, Mr. Gabel produced  some


     records purporting  to  be the annual document required by 40  CFR


     761.45 (1980) for the  period ending December 31, 1978,  but was


     unable to locate the annual document for 1979  (Tr. 15).  Mr.  Gabel


     told the inspectors that he had the document for 1979,  but could


     not locate  it.   He  was informed in effect that it would be alright


     if the documents were  mailed to them (EPA) (Tr. 46).


6.    Dr. Gevirtz was shown  and  examined Respondent's inventory records


     relating to PCBs and Mr. GabeV furnished him a copy  of  each  document


     he (Gevirtz)  requested (Tr. 113-14).  In Mr. Gabel's opinion, the


     data he had available  was  the information required to be kept in
                                                          •\ ~.

     an annual document.  He acknowledged, however, that he did not


     furnish Dr.  Gevirtz a  complete annual document at the time.


     Mr. Gabel testified that the data was maintained in handwritten


     form in a file  drawer  in his office and that each time there was a


     change [in  the  PCB  inventory data] he was notified (Tr.  114-15).


     Respondent  alleges  that the inventory records included a detailed


     listing of  the  number of drums stored on a  certain  date, the


     number of gallons of liquid, the approximate parts  per million


     and the calculated weight of PCB substance  (Reply Brief  at  4).


     The inventory record, however, (Respondent's Exh 22), which contains

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                                     5

      known  and  assumed  concentrations of PCBs  (700,000 ppm in some drums

      and  2,600  ppm in other drums) and the weight of Askarel in kilograms

      per  gallon together with total  weights of PCBs in kilograms, is

      dated  December 31, 1980, and consequently was not in existence at

      the  time of the inspection.  Mr. Gabel, however, prepared the

      inventory  record (Respondent's  Exh 22) from data in his files which

      included parts per million of PCBs (Tr. 119).  The inventory record

      is based upon the assumption that each drum contained 54 gallons.

 7.    After  a discussion of Respondent's activities and an examination of

      available  records concerning PCBs, Dr. Gevirtz and Ms. Dalton,

      accompanied by Mr. Darby, inspected the manufacturing and storage

      area (Tr.  57).  In an area aproximately 30 inches below the level

      of the main floor and measuring approximately 30 feet|/  by 20 feet,

      referred to as the pit, well  or loading dock area,  was a 2,300-

      gallon tank, which the inspectors were informed was filled  with

      pure Askarel  (Tr.  18, 128, 145, 146;  photo,  Gov't Exh 4).   Mr.  Gabel

     testified,  however, that the tank contained  approximately  1500

     gallons (Tr.  146).   This tank,  but  not the area in  which the  tank

     was stored, contained the PCB mark  required  by 40 CFR 761.20  (1980).

     There were  two- other empty tanks.!/  and  two  55-gallon drums.1/  bearing

     PCB labels  in  the  well  area.   The PCB  labels on the  tanks were  at an
     JJ  This is an estimate by Dr.  Gevirtz.   Respondent  asserts  that  the
well is actually twice that long (Reply Brief at  1).

     :Ll  Dr.  Gevirtz remembered only one tank being  in  the  well area
(Tr. 64).

     £/  Count I of the complaint dealing with the lack of  a  Spill
Prevention and Countermeasures (SPCC) Plan was amended  to delete  reference
to these drums (Tr. 6), apparently based on Respondent's  representation
that the drums were empty.

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                                    6


     elevation above the level of the main floor.   See photos  taken by


     Mr. Darby immediately prior to the hearing (Respondent's  Exhs 11


     and 12), Mr. Gabel's testimony that the labels in the photos were


     in the same place on October 22, 1980 (Tr. 132),  and Mr.  Darby's


     testimony that the tanks looked the same when  the photos  were taken


     as they did on October 22, 1980 (Tr.  160-61).   Other objects in the


     well area at the time of the inspection included  at  least one


     transformer, a steam jenny,  a  painting  tray and pallets (Tr. 130,


     146, 159-60, 168; photos, Gov't's Exhs  5,  6 and 6A).   The well  area


     contained tracks and a large door at  the rear, allowing entry by

                                   •
     railroad cars or trucks (photo,  Gov't Exh  3).


8.   In an area to the rear of the  building  at  Dale Road  were  three  mineral


     oil storage tanks having capacities of  3,000,  8,000  and, 12,000 gallons
                                                           •*i ™".

     (Tr. 15, 39; photo,  Gov't Exh  7).   The  EPA inspectors  were informed


     that the.tanks contained new mineral  oil.  Because of  this information,


     samples were not drawn from  the  tanks,  as  normally would  have been


     done,  if the tanks contained used mineral  oil  (Tr. 40).   Mr.  Gabel,


     however, testified that the  purpose of  the 3,000-gallon tank  was  to


     hold used transformer liquid (Tr.  150,  151).  A note on the  annual


     document for V980 (Tab A,  Respondent's  Exh 1) states that they  had


     received a test report showing 2,600  ppm PCBs in  the 3,000-gallon


     mineral  oil  storage  tank  not previously  known to  be contaminated


     with PCBs.


9.   Complainant has alleged and  Respondent  has admitted that the  Dale Road


     facility and in particular the area where the 2,300-gallon tank of

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                                    7



     Askarel was stored was not covered by a Spill Prevention Control and



     Counter-measure (SPCC) Plan as required by 40 CFR 761.42 (1980).



     This admission included the fact that the PCBs in the mentioned tank



     were stored for disposal.  Mr. Gabel, however, testified that Respondent



     had available equipment such as absorbent materials, shovels, .brooms,



     etc. and a number of personnel who were trained to clean-up drips,



     and spills resulting from hose separations, etc., so that  everyone



     knew how to react to such events (Tr. 134).



10.  Completing their inspection at Dale Road, Dr. Gevirtz and Ms. Dalton,



     accompanied by Mr. Darby, proceeded to Respondent's Seneca Street



     facility.  They counted sixty two SB-gallon drums of PCBs  (42 in one



     area and 20 in the other) stored for  disposal  in  two separate areas



     (Tr. 22, 31,  32,  71).   The drums were stacked two levels high, one



     drum on top of another (Tr.  70).   PCB .marks were  visible-on most of



     the drums (Tr. 23, 69, 72, photos,  Govt.  Exhs 8 and 9).   Because of



     the manner in  which  the  drums  were  stored,  however,  it was  not



     possible to observe  PCB  marks  on  each drum.   The  areas where the



     drums were stored were not marked with  the  PCB mark  (Tr. 32, 72).



     Although Count IV of the  complaint  alleges  that the  drums  at Seneca



     Street  were not marked with the  PCB mark, the  complaint  was  amended



     to refer to the area as  unmarked  rather than  the  drums (Tr.  11).



11.  At the  time of the inspection,  Respondent was  in  the process of  con-



     structing metal trays  in  which  pallets  upon  which the drums  were



     stacked would  be  placed  in order  to comply  with the  diking  or  curbing
             i*


     requirements for  storage  of PCBs  specified  by  40  CFR 761.42  (1980)

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                                    8


     (Tr. 81; memoranda,  drawing,  work and purchase orders, Tab B of


     Respondent's Exh 1).   A completed tray  is shown on photographs


     taken at the Seneca  Street  facility at  the time of the inspection


     (Govt's. Exhs 8 and  9).   Although Dr. Gevirtz was critical of this


     method of complying  with  the  requirements for curbing upon the


     ground that leakage  from  a  drum in the  top tier might extend beyond


     the perimeters  of  the  tray, he acknowleged that the trays met the


     minimum requirements of the regulation  (Tr. 28, 30, 83, 85).


12.  Two days after  the inspection, Mr. Gabel sent a letter to Dr. Gevirtz


     enclosing annual documents  for the period July 1 to December 31,


     1978,  and for the  year 1979 (letter dated October 24, 1980,


     Respondent's Exh   1).   It was pointed out that the annual document


     for the year 1979  had  been misfiled, but had since been located.


     The annual  documents were originally handwritten, but had since


     been typed  so that they would be easier to read.  The letter stated


     that all  drums  at  1600 Seneca Street had been placed in metal trays,


     checked for leaks, PCB labels and dates and that the storage area


     had been marked with a PCB label.


 13.  In  telephone  conversations on December 18, 1980, Dr.  Gevirtz


     informed Mr.  Gabel that he (Gabel) had been mistaken in showing


     just the  weight of PCBs rather than  total  weight of materials


     including PCBs on the annual documents (Tr.  50,  118;  memo dated


     12/18/80, Tab A, Respondent's Exh 1).   Respondent  had apparently


     estimated the weight of PCBs in drums  containing PCB debris (rags,
             -<*

     contaminated  clothing,  sawdust, etc.)  and  reported only that

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      figure.!/   As to liquids, Respondent had apparently analyzed

      samples of Askarel or relied upon analyses showing Askarel contained

      Aroclor at a concentration of 700,000 ppm and reported only the

      weight of Aroclor.  Mr. Gabel relied upon a note in the regulation,

      which he considered authorized that method of reporting..§/ Neither

      the letter of October 24, 1980 nor the annual documents, however,

      included any data as to volumes of PCBs in the containers nor any

      assumptions as to the density of PCBs, which are a prerequisite for

      application of the note.  While it is not clear that these assumptions

      were among data, copies of which were furnished to Dr. Gevirtz on
                                   •  "
      October 22, 1980, density of PCBs was among data in Mr. Gabel's

      f i 1 e.

14.   Mr. Gabel  had available data from which the weights of PCBs could be
                                                            ••i^.
      calculated and by letter,  dated January 9, 1981,  submitted revised
     .§/  If it be assumed that a  typical  drum of PCB debris (rags,  clothing,
sawdust, etc.) weighs 65 kg (finding 14,  infra), annual  documents  show
three drums of such- material  were in storage at the Seneca Street  facility
on December 31, 1978, two drums on December 31, 1979 and four drums in
storage on December 31,  1980.   These numbers are consistent with the
inventory record (Respondent's Exh 22), and do not support the thought that
only the estimated weight of  PCBs in such materials was  initially  reported.

     LI  Tr.  118, 141-42.  The note referred to (40 CFR  761.45 (1980), 44
FR No. 106, May 31, 1979 at 31557) provides:
            . •*
         "Note:  Any requirements for weights in kilograms of PCBs
          may be calculated values if the internal volume of
          containers and transformers is  known and included in the
          reports, together with  any assumptions on the  density of
          the PCBs contained  in the containers or transformers."

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                              10
 annual documents containing recalculated weights (Tab A, Respondent's



 Exh 1; Tr. 118; inventory record, Respondent's Exh 22).  As indicated



 (finding 6), the inventory record contains data as to known and



 assumed concentrations of PCBs.  These data, however, were not contained



 in the letter or the annual  documents.  The letter stated that it was



 assumed that each 55-gallon  drum of liquid PCS contained 54 gallons,



 rather than 52 gallons as in the initial documents, unless the exact



 content was known, and that  recalculated weights were based on the more



 commonly accepted value for  Askarel  of 5.875 kg/gal rather than 5.67



 kg/gal used previously.  Because of the necessity or desirability of



 allowing for expansion due to increases in temperature, a 55-gallon



 drum is not normally filled  with 55 gallons (Tr. 120).   A drum



 containing PCB debris (rags, contaminated protective clothing, sawdust,



 etc.) was weighed at 65 kg net and  this weight  was  assumed  to  apply to



 all drums containing solids.  The revised annual  documents  revealed



 the presence of four drained,  in-service (not-slated-for-disposal)



transformers, which were not shown  on  the initial  documents.   The



letter further stated the tank at Dale Road had been  emptied and  found



to containing less Askarel than shown  on inventory  records  and that



inventory figures had been adjusted  to show correct weights.   Although

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                                    11
     Dr. Gevirtz considered that exact quantities of PCBs in gallons should
     have been furnished, he did not contact Mr. Gabel  because he assumed
     that all information available had been supplied (Tr. 52).
15.  The purpose of the requirement for annual  documents is  so that a
     person or firm handling PCBs will have records to  enable it to keep
     track of PCBs  and to enable EPA to more readily monitor compliance
     with the regulations (Tr.  34, 35).
16.  The complaint,  issued on August 7, 1981, charged Respondent with
     five violations of the Act and regulations.  Count  I alleged that
     Respondent  on  October 22,  1980, stored PCBs at  the  Dale Road facility
     without  an  SPCC Plan as required  by 40 CFR 761.42,  Count II alleged
     that Respondent stored sixty two  55-gallon drums of PCBs at  the  Seneca
     Street  facility in an undiked or  uncurbed  area  in  violation  of 40  CFR
     761.42(b),  Counts III and  IV alleged that  the areas at  tale  Road and
     Seneca Street where PCBs were stored did not have the PCB  mark as
     required  by 40  CFR 761.20  and Count V  charged Respondent with  failure
     to  prepare and  maintain  an annual  document showing  inventory  and
     disposal  of PCBs  as  required  by 40 CFR 761.45.   Penalties  of  $15,000
     each were proposed for Counts  I and II,  $5,000  each for Counts III
     and  IV and $10,000 for Count  V  for a total  of $50,000.   Respondent
     has  not contended that the  amount  of the proposed penalty  would
     adversely effect  its  ability to remain  in  business.

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                                    12

                               Conclusions.
1.   Respondent's action on October 22,  1980,  in  storing for disposal
     approximately 1,500 gallons  of PCBs  at  its Dale  Road facility without
     having in effect a Spill  Prevention  Control  and  Countermesures (SPCC)
     Plan constitutes a violation of 40  CFR  761.42(c) (7) (i i)  (1980) and
     of section 15 (15 U.S.C.  2614)  of the Act.
2.   Respondent's action on October  22,  1980,  in  storing  for  disposal  62
     55-gallon drums of PCBs at its  Seneca Street  facility in an  undiked
     or uncurbed area constitutes a  violation  of  40 CFR  761.42(b) (1 )(ii)
     (1980) and of section  15  of  the Act.
3.   Respondent's action on October  22, 1980,  in storing  for  disposal  PCBs
     in areas  not marked with  the PCB mark at  its  Dale Road  and Seneca
     Street facilities  constitute  violations of 40 CFR 761.42(c)(3) (1980)
                                                           •-i "•.
     and of section  15  of the  Act.
4.   Although  Respondent on October  22, 1980,  had .what purported to be annual
     documents  for the  period  ending  December  31, 1978 and for the  calendar
     year 1979,  these documents were  incomplete in that they  contained
     estimated  net weights  of  PCBs rather than total weight of PCBs  and
     PCB items  and articles  in containers as required by 40 CFR 761.45(a)(l)
     and (3) and  (b)(3)  (1980).  These documents  were also incomplete  in
     failing to  show  a  shipment of 634 kg of PCB liquid shipped from Dale
     Road to Seneca Street  on  September 11,  1979  as required  by 761.45(b)(4)
     and the presence of  four PCB transformers, which although drained, were
     slated fgr future use  rather than disposal (761.45(a)(1)(ii)).  Even

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                                     13



      If  the  revised  documents  submitted under date of January. 9, 1981, be

      regarded  as  complying with the  regulation, the document  for calendar

      year  1979 was required to be available not later than July 1, 1980

      and thus  Respondent was not in  compliance with 40 CFR 761.45(a).

 5.    For the above violations of the regulations and Act, Respondent is

      liable for a civil penalty in accordance with section 16(a) of the Act

      (15 U.S.C. 2615(a)).



                                Discussion

      While in  its answer, Respondent denied Counts III, IV and V,  the only

 violation  seriously disputed factually is Count V.  This count alleges that

 Respondent failed to prepare and maintain annual  documents for the period

 ending December 31, 1978 and for the calendar year 1979 as required by
                                                          ' M
 40 CFR 761.45  (1980).  Respondent points out that the regulation does not

 require that the data be in any particular form or format and asserts

 that Respondent had all  the raw data, maintained  the  data in  annual

 documents, delivered the data to EPA inspectors,  recalculated the  weights

 and submitted revised annual  documents  when  requested  to  do so (Proposed

 Findings  and Conclusions, dated July 1,  1983,  at  9,  10).   Respondent  argues

that the  mere fact that  a different  system of  computation  might  be more

 accurate, should not  be  sufficient  to constitute  a  violation  of  the

 regulation  requiring  an  annual  document.   It points out that  Dr. Gevirtz

made no effort  to contact Respondent after receipt  of  the  revised  annual

documents and that it was reasonable for Respondent to assume  that it had
            •*
submitted a satisfactory report.   These  arguments  are  wide of  the mark,

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                                    14



 because  it  is  not  merely that a different system of computation might be



 more accurate,  but what the  regulation reasonably construed  requires.



 Moreover, Dr.  Gevirtz's reason for not calling Mr. Gabel was that he



 assumed  that all available information had been furnished.



      The purpose of an annual document is to enable a person or firm to



 keep track  of  PCBs and to enable EPA to readily monitor compliance with



 the  regulations (finding 15).  Obviously, annual documents incomplete as



 to quantities  of PCBs and PCB contaminated materials cannot effectively



 serve this  purpose.



      Mr. Gabel apparently interpreted the note at 40 CFR 761.45(b)(4)



 (1980) (note 6, supra) as allowing the reporting of only estimated net



 or calculated weights of PCBs rather than the total  weight of PCBs and



 PCB  items,  articles, etc.   The note refers only to PCBs rather than PCB



 items, articles, etc., and cannot properly be so interpreted;-  Dr. Gevirtz



 informed Mr. Gabel   in the first  telephone conversation  that Respondent



 was  supposed to actually weigh each drum  without regard to the note and



 in the second telephone conversation  that the note apparently applied



 only to mixtures containing low  levels of PCBs where  it could be assumed



 that the weight of the oil  and the weight of  the mixture including PCBs



 would not significantly differ.   There is no  warrant  for the latter



 restrictive interpretation  of the  note.   Complainant  asserts  flatly that



 the  revised annual  documents  submitted on January  9,  1981,  were  incomplete,



 because Respondent  had not  weighed  each drum  containing  PCBs  (Opening



 Brief at 18).   Respondent weighed  one  drum of PCB  debris or solids



 and applied  that weight  to  each drum containing  similar  material and



 Complainant  is  correct that each drum  of  PCB  solids should  have  been



weighed.   The note, however,  allows the use of calculated weights  for

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                                     15


 liquid PCBs,  if  internal volumes of  containers are knownZ/   and included

 in  the reports together with any assumptions as to density of  PCBs in

 the containers.   An  obvious purpose  of the note is to  preclude the

 necessity of  weighing each container of liquid PCBs.   The size of the

 drums  and assumed volumes were provided in the letter  of January 9,

 1981.   It has been found (finding 6) that known and assumed densities

 of  PCBs were  among data available to Dr. Gevirtz at the time of the

 inspection on October 22, 1980.  While deficient in that exact quantities

 of  PCBs in gallons were not stated, it is concluded that the revised

 annual documents  furnished under date of January 9, 1981, substantially

 complied with the regulation requiring such documents.


                                 Penalty

                                                        •  'r '-^-
     Section 16(a) of the Act  provides in pertinent part:

          "(2)(B)  In determining the amount  of a  civil penalty,
          the Administrator shall  take into account the nature,
          circumstances,  extent,  and gravity  of the violation or
          violations  and,  with  respect to the violator, ability
          to pay, effect  on ability to continue to do business,
          any history of  prior  such violations, the degree  of
          culpability, and such other matters as justice may
          require."

     EPA published guidelines  for the assessment of civil  penalties

under the Act on  September  10,  1980 (45 FR  No.  177  at  59770,  et seq.).

The guidelines establish  a  gravity  based  penalty dependent  on the

probability  and extent of  potential  damage.   Probability is categorized

as high, mid or  low  range  (circumstance  levels), while  extent of potential

damage is  characterized as  major, significant or minor  (45  FR at 59777).
     2J  Dr.  Gevirtz testified  that  assumptions  as  to  the  specific
gravity (parts PCBs  per million)  of  Askarel  could be made  and this
specific gravity  applied to  calculate weights  in kilograms,  if the
exact number  of gallons was  known (Tr.  53).   This is a proper
interpretation of the note.

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                                    16


 A major  violation in the high range of probability (Circumstance Level 1)

 calls  for the maximum penalty for a single violation of $25,000, while a

 major  violation in the low range of probability (Circumstance Level 6)

 calls  for a penalty of $2,000.  Violations of the regulations are

 classified into eight categories, the instant ones relating to storage,

 marking  and recordkeeping and three of which were classified as major

 because  of the quantities (in excess of 1100 gallons) and concentrations

 of PCBs  (in excess of 100,000 ppm involved).

     Major storage violations are categorized as Circumstance Level 3 and

 the lack of a SPCC Plan at the Dale Road facility resulted in a proposed

 penalty  of $15,000 under Count I of* the complaint.  The lack of diking

 or curbing at the Seneca Street facility was also a  Circumstance Level 3

 violation, again resulting in a proposed penalty of  $15,000.  The marking
                                                            • \
 violations (Counts III and IV of the complaint)  were placed in Circumstance

 Level  5  (minor marking violations)^/  and a  $5,000 penalty proposed for

 each count.   Failure to have  annual  documents was  placed  in Circumstance

 Level  4  (a major record-keeping violation) and a $10,000  penalty proposed.

     Although  the ALJ is required by the Rules of  Practice (40 CFR 22.27(b))

 to consider the guidelines in determining the amount  of the penalty, he
     .§/  This was in accordance  with  the  penalty  policy  describing  as
minor marking violations:

          "Low Range

             Level  five:

             (3)   Minor marking  violations.  These are situations
             in which  all  the  requirements of the rule have not
             been followed,  but  there are sufficient indications
             to notify someone unfamiliar with the situation that
             PCBs are  present  and enable them to  identify PCB
             items.  An example  would be the failure to mark a
             transport vehicle containing PCB items which are
             themselves marked"  (45 FR at 59780).

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                                     17


 is  not  bound thereby.  For the reasons hereinafter  appearing, it is

 concluded that  strict application of the  guidelines in  this  instance does

 not provide the basis for an appropriate  penalty.

     Respondent contends that the evidence establishes  its good faith in

 attempting to comply with PCB regulations, while Complainant asserts that

 the evidence demonstrates the opposite.   Mr. Gabel,  who is a graduate of

 MIT and a registered professional engineer, testified that in an effort to

 keep up with PCB regulations he checked the index of the Federal Register

 on a daily basis and read any portions he considered pertinent (Tr. 108-09),

 He also read literature concerning PCB regulations  in various technical

 magazines and publications including information published by'the National

 Electrical Manufacturer's Association of which Respondent is a member.

 He maintained a file of Federal  Register and other information pertaining
                                                           »* ~.
 to PCBs, sending copies of various materials and notes and comments

 thereon to Mr.  Darby (Tr. 156).

     From the foregoing evidence, Complainant argues that Mr. Gabel was

 well  informed concerning  the  requirements  of the PCB regulations and the

 penalties for noncompliance (Brief at 20).  Complainant emphasizes  that

 Mr.  Gabel  was a registered professional  engineer and points  out  that

Mr.  Darby was an experienced  and  sophisticated  businessman,  having  been

an executive with  RCA for 16  years prior to assuming the presidency of

Respondent.   Complainant  further  emphasizes that Mr. Darby was kept

informed of  the requirements  of  PCB  regulations  by Mr.  Gabel  (Id. at  22).

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                                    18

 Complainant says that these executives clearly did not translate their

 knowledge  of PCB regulations into action [necessary for compliance].

      Respondent on the other hand asserts that Mr. Gabel and Mr. Darby

 were  open, honest and cooperative with the inspectors, spending as much

 time  with them as necessary, allowing them access to available records

 and to the plant, permitting photos to be taken and furnishing the inspectors

 with  copies of requested documents (Proposed Findings at 14).  Respondent

 also  points out that additional documents were mailed to EPA within two

 days  of the inspection and that Respondent had available inventory data

 enabling it to keep track of PCBs and to furnish reasonably complete

 annual documents when the necessity, therefor was called to its attention.

 Mr. Darby testified that the drums of PCBs at Seneca Street were

 inspected on a daily basis and  that movement in the area where the drums

 were  stored was discouraged (Tr. 164, 175).   This testimony is cited to

 buttress the contention Respondent acted in  good faith.  Respondent also

 cites Mr. Gabel's testimony to  the effect that over a two-year period

 beginning in 1978 he made several  telephonic inquiries of EPA to ascertain

 if there was an approved facility to incinerate PCBs  of over 500 ppm, the

 answer being that it would be another few months  before such a facility was

 available as only trial  "burns" were being conducted  at the time..?/

     Complainant seems  to be of the view that the violations border on

 wilful ness, which appears to be based on the assumption that Mr.  Gabel

 was thoroughly familiar,  if not expert,  with  regard to the  PCB regulations.

 The evidence does not establish that this is  so and it is  concluded that
             i«
 Respondent's  position that the  evidence  demonstrates  its  good faith must
     I/  Tr.  135-40.   Although  Dr.  Gevirtz  testified  that  facilities  to
incinerate high concentrations  of  PCBs  in El  Dorado,  Arkansas  and  Deer
Park, Texas had been  approved (Tr.  179-80), no such facilities were
available at  the time of the  inspection  on  October 22, 1980, the approvals
not being forthcoming until 1981.

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                                     19

 be accepted.!*V    Although  Mr.  Gabel  made  commendable  efforts to

 familiarize himself  with  and to keep abreast  of  changes  to  PCB regulations,

 he misinterpreted  the note  at 40 CFR 761.45(b)(4)  (1980) as authorizing

 the recording  of estimated  net  weights of  PCBs in  annual documents  rather

 than total weights including PCB contaminated materials.  This, of  course,

 is not to excuse any violation,  but  merely to demonstrate that Mr.  Gabel's

 understanding  of the regulations was less than profound.  This fact

 together with  the  further fact  that  in none of the violations charged

 does it appear that Respondent  totally ignored the requirements of the

 regulation!!/  and Respondent's  prompt corrective action amply establish

 Respondent's good faith.ll/
                                   •              *
     Respondent's position is that because of the location of the tank

 containing PCBs at Dale Road and the availability of personnel  and
     1Q/  Although troubling from the standpoint of Respondent's compliance,
the disclosure in the annual document for 1980 of the receipt on December 4,
1980, of a test report showing a concentration of 2600 ppm PCBs in a 3,000-
gallon tank of used mineral  oil  previously thought to be uncontaminated
(finding 8) strengthens rather than detracts from this conclusion.  This is
because Respondent had no obligation to have the annual  document for 1980
available until July 1, 1981 and no obligation to submit that information
to EPA.  In this connection, Respondent asserts that Mr. Rebel's testimony
(Tr. 151) to the effect that repaired transformers were  some times filled
with oil from this tank was  mistaken and has stated that it is prepared to
move to reopen the record and to submit affidavits from  Mr. Gabel  or other
employees that oil from this tank was not used in other  transformers (Reply
Brief at 13, 14).

     .!!/  It is recognized that  a possible exception is  the lack of a
SPCC Plan at Dale Road.  The area where the tank containing PCBs was stored,
however, 'had far higher diking than the regulations required on three sides,
which together with available equipment and personnel, made it likely that
all  but catastrophic spills  would be contained.
         ' Good faith is  relevant  because  among factors which the
statute requires  be considered  in determining  the  amount  of penalty  is
"degree of culpability."   Culpable suggests  less stringent  blame than
guilty and connotes malfeasance or errors of omission, negligence  or
ignorance.  Webster's  Third  New International  Dictionary  (1967).

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                                    20
 equipment  for  clean-up of spills, contamination of the area was unlikely
 (Proposed  Findings  at 3).   See note 11, supra.  Complainant disputes this
 position upon  the ground that it ignores the fact the floor of the well
 area was at  grade level and that there was no barrier to the rear or
 fourth  side.   (Reply Brief at 3).  It is concluded, however, that the
 substantial  diking  on three sides would assist immeasurably in the
 containment  of all  but catastrophic spills.  Complainant appears to
 agree for  it asserts that any spill of 1500 gallons of PCB fluid in the
 tank  would flow unrestricted out the back door (Id.).  Because activity
 in  handling  PCBs at Dale Road had essentially stopped (repair of PCB
 transformers having been discontinued in 1979),  a  spill  of such a magni-
 tude  was unlikely.  Because of this circumstance and Respondent's good
 faith, an appropriate penalty for the lack of a  SPCC Plan at Dale Road
 is  considered to be $7,500.
      Respondent was in the process of constructing trays in which to
 store the drums of PCBs  at Seneca Street at the  time  of  the inspection
 on October 22, i960.  These  trays undisputably complied  with the
 requirements of the regulation (40 CFR 761.42(b) (1) (ii))  (1980) and
 Complainant's contention that Respondent should  have  done more  to protect
 against  the possibility  of leaks  from  drums in the  second tier  has no
 support  in  the regulations and no place  in  determining an appropriate
penalty. Although  Complainant asserts that the drums were  stored in an
undiked  area for three years,  the disposal  and marking regulation was
only effective  as of April 18,  1978  (43  FR  No. 34, February 17,  1978,  at
7150, et seq.)  and  it is  clear that  prompt  corrective action was  taken,
Respondent's  letter  of October 24, 1980, reporting that the process of

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                                     21



 placing drums in trays had been  completed.   Under  all the circumstances,


 an appropriate penalty for this  violation  is  considered to be $7,500.


      Regarding the marking violations (Counts  III  and IV of the complaint,


 Respondent argues that the PCB marks on the  three  tanks in the well area


 at Dale Road and the PCB marks on the drums at Seneca Street serve the


 same  purpose and therefore constitute essential compliance with the marking


 requirements of 40 CFR 761.20 (1980) (Proposed Findings at 3).  It is, of


 course, clear that the requirement for marking areas where PCBs are stored


 is  separate from the requirement for marking  PCB containers, the regulation


 (40 CFR 761.20(a)) (1980) providing in pertinent part:  "Each of the


 following items in existence on or after July 1, 1978, shall  be marked


 *  * * (10) Each storage area used to store PCBs and PCB items for disposal."


 It  is also clear that one of the purposes of the marking requirement is to
                                                           •\ ^.

 warn individuals entering or approaching a PCB storage area of the presence


 of  hazardous materials and of the necessity to exercise  caution.   Accordingly,


 the more conspicuous the PCB marks are,  the more likely  it is that their


 warning purpose would be served.   The regulation,  however, does  not require


 that a PCB storage area be marked in any particular manner and Complainant's


 argument (Brief at 15), that  a PCB mark  should have been  placed  on the


 outside of the door leading to the well  area at Dale Road  and that a


 second mark should have been  placed on  a stanchion  adjacent to the well


 area inside the building ignores  the "or" in Dr.  Gevirtz's testimony describing


 possible alternative  methods  of complying with the  area  marking  requirement


 (Tr. 21, 22).^


     In  support of its  position that  area markings  would have added little


to the usefulness  of  existing labels  as  warnings, Respondent  has introduced a

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                                    22

 photo (Exh 17)  showing  the  area where the drums were stored at Seneca

 Street marked with PCB  labels affixed to boards or pieces of cardboard

 suspended by  wires from the ceiling or overhead supports, while another

 photo (Exh 18)  shows  the same area without the labels.  Dr. Gevirtz

 testified that  Respondent's photos (Exhs 11  through 14 at Dale Road and

 15 through 18 at  Seneca  Street) did not depict the reality of the

 situation [with regard  to visibility of the labels] at the time of the

 inspection because the  areas in the photos were more neat, the drums were

 stacked  in a  more  orderly manner with PCB labels facing one direction and

 the lighting  was  far  better (Tr. 61, 62, 73, 74).   Accepting this testimony

 as  accurate,  it nevertheless appeals that Respondent's position has a

 substantial basis  in  fact.ll/   Under all  of the circumstances, an

 appropriate penalty for  each of the marking  violations is considered to

 be  $1,000  for Count III and $1,000 for Count IV.            ':-'

      Regarding Count V,  failure to have annual  documents,  it  is clear that

 Complainant is literally correct.   Even if the  failure to  locate  the document

 for 1979 at the time of the inspection on  Octobe 22,  1980, is  excused,  the

 annual documents submitted under date  of October 24 contained only estimated

 net  quantities including PCB contaminated materials,  failed to  include  a

 shipment of PCBs from Dale Road  to Seneca Street and  failed to  mention  the

 presence of four drained PCB transformers slated for  future use.   The first

 deficiency resulted from Mr. Gabel's misinterpretation  of  the note at
     1    Complainant emphasizes  Mr.  Darby's testimony that  because  the
pit area at Dale Road was used for  painting of transformers  and  other
activities, it was possible for the labels on the tanks to be covered
by overspray from the paint from  time to time (Tr. 171-72).   It  is clear,
however, that this was not the situation at the time of inspection,  there
is no indication of the frequency of  such happenings, if they in  fact
occurred, and this appears contrary to testimony of Messrs.  Gabel and Darby
(finding 7) that tanks and labels in  the photos (Respondent's Exhs 11
through 14) looked the same on October 22, 1980.

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                                     23

 40 CFR 761.45(b)(4)  (1980) and is clearly the more serious.   It  is

 concluded that the shipment of PCBs was reflected in the inventory  at

 Seneca Street, there  being no evidence to the contrary  and the failure

 to mention four transformers, which had been drained of PCBs, is  certainly

 a  marginal  omission.   Although the revised annual  documents contained

 assumed rather than actual  volumes of  PCBs, it has been determined  that

 assumed and known  data  on  PCB densities were available  to Dr. Gevirtz

 and that the  revised  annual  documents  substantially complied with the

 regulation.   It  is concluded  that Respondent had  available records

 enabling it to reasonably  keep track of PCBs and  thus one of the purposes

 of  annual  documents (finding  15)  was. served.   Under all  of the circumstances,

 an  appropriate penalty  for  the  failure  to  have complete annual documents

 is  considered  to be $4,000.

      It  is  concluded  that  an  appropriate total  penalty  for the violations

 herein  found is $21,000.M/    The  purpose  of  a  penalty  is to deter further

 or  future  violations  and it is  considered  that  this  sum will  adequately

 achieve that purpose under the circumstances  prevailing herein.
     _11/  Although the penalty guidelines have been determined to be
inapplicable, it is noted that adjustments of up to 40% from the gravity
based penalty are authorized (up to 15% for attitude of the violator and
up to 25% for borderline situations separating minor and significant
violations) (45 FR at 59773 and 59776).  It is also noted that an
essentially equivalent result would be reached by adopting Respondent's
contention (Proposed Findings at 12) to the effect that if they are
violations at all, the first four counts of the complaint should be
treated as Level 5 (minor storage and marking violations), because any
spilled material would be substantially contained, damage would be
relatively smaJl and markings were sufficient to alert anyone approaching
the area of the presence of PCBs.  Respondent contends that Count V
should be treated as a Level 6 violation, because it is a minor
record-keeping violation which does not seriously impair EPA's enforcement
efforts.  Respondent also contends that all  violations should be placed
in the minor extent category, which would, of course, reduce the penalty
to approximately 10% of that determined here.

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                                     24


                               Conclusion!!*/


      For  the  violations  of  section  15 of the Toxic  Substances Control Act

 (15 U.S.C.  2614)  and  regulations  herein found, a penalty  of  $21,000  is

 assessed  against  Respondent  Niagara  Transformer Corporation, pursuant to

 section 16  of the Act.   Respondent  is ordered to pay the  same by submitting

 a  certified or cashiers  check  to  the Regional Hearing Clerk  in the amount

 of $21,000  payable to the1Treasurer  of the United States  within 60 days

 after  receipt of  this order.

     Dated  this 22nd day of  September 1983.
                              Spencer T. Nissen
                              Administrative Law Judge
     15   Unless appealed in accordance with 40 CFR 22.30 or unless the
Administrator elects to review the same sua sponte as therein provided,
this decision will  become the final  order of the Administrator in
'accordance with 40 CFR 22.27(c).

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25

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                   \  BEFORE THE ADMINISTRATOR -
              U.S.  E\VI RON-MENTAL PROTECT ION AC ENCY
                          WASHINGTON, D.C.
 In the Matter of:
Bell & Howell Company,
A Delaware Corporation
                                        TSCA-V-C-033, 034, 035
                           FINAL DECISION



     Complainant, U.S.  Environmental Protection Agency, Re-


gion V, Chicago, Illinois,  appeals  an initial decision of


Administrative Law Judge Gerald Harwood,  decided February


3, 1983, in w>.ich civil penalties  in the total amount of


$12,750 were assessed against  Respondent,  Bell & Howell


Company, for violating  regulations  issued under section 6(e)


of the Toxic Substances Control Act ("TSCA"), 15 U.S.C. 2615.


Complainant's appeal is restricted  to contesting the amount


of the penalty assessed against Respondent.   Complainant con-


tends that the full penalty it  proposed,  namely, $31,000,


should have been assessed  against Respondent, and that the


presiding officer erred when he reduced  the  penalty to $12,750.


In response, Respondent argues  that the  ALJ  failed to give full


consideration to substantial mitigating  factors and that no


penalty should have been imposed.   Respondent did not, however,


take an appeal from the initial decision.  Consequently,  this


decision only addresses matters falling  within the scope of


Complainant's appeal.

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     This proceeding began when Complainant  filed  three




separate complaints against Respondent  in which  it was alleged




that Respondent had violated the regulations  establishing




recordkeeping and marking requirements  for owners  of trans-




formers and certain capacitors containing polychlorinated bi-




phenyls (PCBs).  40 CFR Part 761 (19RO).  Each complaint relates




to a separate facility owned and operated by  Respondent in




Chicago, Illinois, referred to, respectively, as Lincolnwood.




North (Docket No. TSCA-V-C-035), Hibbard (Docket No.  TSCA-VC-034) ,




and Lincolnwood South (Docket No. TSCA-V-C-033).   Complainant




alleged violations of the recordkeeping requirements  at all three




facilities and proposed civil penalties in the following amounts:




Lincolnwood North ($10,000), Hibbard ($10,000) and Lincolnwood




South ($1,000), for a total of $21,000.  The  presiding officer




reduced these by 75 percent — Lincolnwood North ($2,500),




Hibbard ($2,500) and Lincolnwood South  ($250), for a  total  of




$5,250.   Complainant also alleged a violation of the  marking




requirements (failure to display approved warning  labels)  at




Lincolnwood South, and proposed a penalty of  $10,000  for that




violation.   The presiding officer reduced it by 25  percent  to




$7,500.   Thus,  taken together,  civil penalties in  the  total




amount of $31,000 were proposed by -Complainant,  whereas the




amount actually assessed by the presiding officer  was  $12,750.




For the reasons stated below,  the presiding officer's  decision




is affirmed in part and modified in part.

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      TSCA  §16(a)(l)  authorizes civil penalties in the amount of

 $25,000  for  each  violation,  and each day a violation continues

 constitutes  a  separate violation.   In determining the amount of

 a  civil  penalty,  TSCA §16(a)(2)(B)  lists the following factors

 that  are to  be  taken into account:

             [T}he nature,  circumstances,  extent,  and
           gravity of the  violation  or violations and,
           with  respect to the  violator,  ability to pay,
           effect  on  ability  to continue  to do business,
           any history of  prior such violations,  the de-
           gree  of culpability,  and  such  other matters
           as justice may  require.      •

     Th^ procedural  rules governing this proceeding,  40  CFR

 Part 22  ,1982), address the'question of  setting the penalty
                        i/
 amount in  general terms,   directing the  presiding  officer in

 §22.27(b)  to set  the amount  "in  accordance with any criteria

 set forth  in the  Act."  In addition,  the rules specifically

 direct the presiding officer to  "consider" any civil  penalty

 guidelines issued under the Act  and,  if  he assesses a penalty

 which is different from the one  proposed in the  complaint,  to

 give his reasons  for the  increase or decrease:

             (b) Amount of civil penalty.   If the  Presiding
          Officer determines that a.violation has  occurred,
          the Presiding Officer  shall  determine  the dollar
          amount of  the recommended  civil  penalty  to  be  asses-
          sed in the  initial decision  in accordance with  any
          criteria set forth in  the  Act  relating to the  proper
          amount of  a  civil penalty,  and must consider any
          civil penalty guidelines  issued  under  the Act.  If
          the Presiding Officer  decides  to assess  a penalty
JL/  The rules are of general applicability and apply to EPA
civil penalty proceedings under other statutes as well as TSCA.

-------
          different from the amount of  the penalty recom-
          mended to be assessed in the  complaint,  the Pre-
          siding Officer shall set forth in  the  initial
          decision the specific reasons for  the  increase
          or decreased (Emphasis added. ) 2_/

     On September 10, 1980, general guidelines for the assess-

ment of civil penalties under TSCA were published  in the

Federal Register, along, with a separate penalty  policy document

establishing interim civil penalty guidelines for  violations of

the PCB regulations.  45 Fed . Reg. 59770 et  seq.   These guide-

lines were used by Complainant in drafting the complaints here.

The purpose of the guidelines is:

          [T]c assure that TSCA civil penalties  [will]
          be assessed in a fair, uniform, and consistent
          manner; that the penalties are appropriate for the
          violation committed; that economic incentives for
          violating TSCA are eliminated; and that  persons
          will be deterred from committing TSCA  violations. 3>/

     To achieve this end,  the guidelines establish a matrix for

determining the appropriate penalty.  Along  the  horizontal axis,

violations are classified as major, significant, or minor in

terms of the "extent of potential damage" that might occur from

noncompliance; and along the vertical axis,  violations are sepa-

rately classified according to the circumstances surrounding the

violation in an effort to gauge the "probability of damage,"
2/  40 CFR §22.27(b)(1982).

3/  45 Fed.  Reg. 59770 (September 10, 1980).

-------
 i.e.,  whether  it  is  high,  mid-range,  or low.  After a particu-




 lar  violation  is  classified  in  this manner,  the appropriate




 penalty  is then found by  referring to the matrix:




                             TABLE 1
                                 Extent of potential damage




                                 A          B            C




                               Major"   Significant     Minor
Circumstances (probability
of ciamac_, 2s) :
High range. ........... 1

2

4

6


$25 , 000

20,000
15, 000
10,000
5,000
2,000


$17 , 000

13,000
10,000
6,000
3,000
1,300


$5 000

3,000
1,500
1,000 .
500
200
       Source:  45 Fed. Reg. 59777  (September 10,  1980)






     For example, a violation which  is  classified  as  "signif-




icant.," in terms of the extent of potential  damage, and  as




"mid-range — 3," in terms of probability  of damage',  calls




for the assessment of a proposed $10,000 civil penalty.   The




guidelines provide detailed information on how to  classify  a




particular violation, and no effort  will be  made to repeat  it




here.  It is sufficient to note that the chief determinants




for establishing the extent of potential damage  (horizontal

-------
axis) are the total weight and and concentration of the PCB



material(s) involved; and, in determining the probability  of




damage  (vertical axis), the chief determinants are the type of




violation involved and where it ranks in relationship to other




types of violations — for example, under the guidelines,  dis-



posal violations are ranked higher than recordkeeping violations.




     The matrix does not purport to take into account all  of



the statrtory factors which the Agency must consider under TSCA




§16(a)(2)(B); the matrix is intended to embrace only the "nature,




circumstinces, extent and gravity" of the violation.  The  remain-



ing statutory factors, i.e., culpability, history of prior




violations, ability to pay, effect on ability to continue  in




business, and such other factors as justice may require, can be



considered in making adjustments to the amount arrived at  through




use of the matrix.   In this manner, the guidelines take into




account all of the statutory factors which must be considered



before a civil penalty is assessed.




     Turning now to the specific matters raised on appeal. Com-




plainant's chief objections to the initial decision center on



the presiding officer's reduction of the recordkeeping penal^




ties.   Complainant charged Respondent with not having an "annual




document" prepared for each of the three facilities in accordance



with 40 CFR §761.45(a)(1980),  which,  in pertinent part,  provides:

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           §761.45  Records and monitoring
              (a)  PCB's and PCS items  in service or pro-
           jected for disposal.  Beginning  July 2,  1978,
           each owner or operator of a  facility containing
           at  least 45 kilograms(99.4  pounds)  of PCB chemical
           substances or PCB mixtures contained in a PCB con-
           tainer or PCB containers, or one or  more PCB trans-
           formers, or 50 or more PCB large high or low voltage
           capacitors shall develop and maintain records on the
           disposition of PCB's.  These records shall form the
           basis of an annual document  prepared for each facil-
           ity by July 1 covering the previous  calendar year.
           Owners or operators with one or  more facilities which
           contain PCB's in the quantities  described above may
           maintain the records and documents at one of the fa-
           cilities which is normally manned for 8  hours a day,
           provided the identity of this facility is available
           at each facility containing  PCB's that is normally
           manned for 8 hours a day.  The records and documents
           sheill be maintained for at least five years after the
           faci?.ity ceases containing PCB's in  the  prescribed
           quantities.  The following information for each fa-
           cilJty shall be included in  the  annual document....
           (Emphasis added.)

The information that must be included  in the annual document is

identified in §761.45(a)(l)-(3).  It includes  (1)  the dates

when PCBs  are removed from service, placed in  storage for

disposal,  and transported for disposal, (2) the location and

identity of disposal or storage facilities for PCBs which are

removed from service, and (3)  total quantities of  PCBs by weight

and number remaining in service at the end of  the  calendar year.

     From the foregoing, it can be seen that the information in

the annual document is a summary of PCB activity during the pre-

ceding calendar year.  It is a permanent record that  must be

maintained as long as PCBs are kept at a facility  in  the pre-

scribed quantities (and for five years after the facility no

longer contains PCBs in the prescribed quantities).   The under-

-------
 lying purpose of the recordkeeping requirements is to  ensure




 proper disposal of PCBs, so that further contamination of  the




 environment can be prevented.  The annual document is  an impor-



 tant tool in achieving this goal because it provides a means of



 tracing the disposition of PCBs, and it encourages account-




 ability in persons having control over PCBs.  As an aid to en-




 forcing the Act, it is, therefore, invaluable.  See generally




 In re National Railroad Passenger Corporation (AMTRAK), 101 ALC



 168 (TSCA Appeal No. 82-1, decided April 27, 1982); In re  Briggs  &




 Stratton Corporation, 101 ALC 116, 118-119 (TSCA Appeal No. 81-1,



 decided February 4, 1981).




     When EPA inspected Respondent's facilities on September 5,




 1980,  Respondent had not prepared an annual document for its




 PCBs for either 1978 or 1979, i.e. ,  the two years for  which




 annual documents were then due.   In accordance with the penalty




 guidelines.  Complainant classified the annual document viola-




 tions  at Respondent's Lincolnwood North and Hibbard facilities




 as "major" in extent and "mid-range — 4" in probability of




 damage,  resulting in a proposed $10,000 penalty for each facil-



 ity.  There  were 32 transformers at the Lincolnwood North  facil-




 ity, filled  with 5,003 gallons of PCB dielectric fluid, and




 five (5)  transformers at the Hibbard facility,  containing  1,195




 gallons of the substance.  .There was also one transformer  at




Lincolnwood  South,  containing 187 gallons of PCB dielectric fluid.



Complainant  classified the violation at the latter facility as

-------
 "minor," and thus a penalty  of $1,000 was proposed in the

 complaint.

     Complainant argues  that there is no basis in the record

 for adjusting the penalties  downward from the amount proposed in

 the complaints.  Complainant points to the fact that the amount

 of PCBs involved is large, but,  more importantly,  even though •

 Respondent has since prepared annual documents for 1980 and sub-

 sequent years, Respondent has not  yet prepared the required docu-
                         !/
 meats for 1978 and 1979.     Complainant argues that the documents

 are still needed, that there is  evidence in the record showing

 that the total amount of PCB fluid and the number  of transformers

 may have changed in 1978 or  1979,  and that its ability to en-

 force the requirements of the Act  are hampered by  the absence of

 the documents.  Complainant  further  contends,  with emphasis,

 that penalties should not be reduced as a matter of Agency policy

 when violations remain uncorrected:

          [T]his Agency must not establish a  precedent of
          reducing the penalty before a company achieves
          full regulatory compliance.   To do  otherwise would
        .- undermine the U.S.  EPA's ability to insist  that- -
          environmental laws  be  fully complied with.   Indeed,
          the explicit purpose of  assessing a penalty is  to
          ensure compliance.  This  penalty fails to do this. S_l

     In response, Respondent  raises  a number  of points.   Its

 chief contention centers on  a  continuing  objection,  voiced
4_/  Respondent does not dispute this contention or otherwise
argue that it is not pertinent to the penalty determination.
Instead, Respondent simply asserts, without any documentary
support, that "the status of [its] PCB items at the end of
1978 and 1979 was substantially the same as at the end of
1980 and 1981." B&H App. Br. at 26.

]>/  EPA App.  Br. at 9.

-------
                                10

 throughout the proceeding, to having the presiding  officer  give

 any  consideration whatsoever to the penalty guidelines.   Respond-

 ent  argues that the Agency, by requiring the presiding officer to

 consider the "Agency's views on penalties as established  in its

 role as prosecutor, created a situation whereby it  was imposs-

 ible for the presiding officer to be fair and impartial towards
                                 6/
 Respondent."  B&H App. Br. at 2.    Secondly, Respondent
£/  By motion dated October 20, 1981, Respondent asked that the
presiding officer be disquali-fied for the stated reason that
the regulations required the presiding officer to consider the
penalty guidelines.  Respondent asserted that this requirement
prevented a fair and impartial hearing.  Respondent further
asserted that to obtain a fair and impartial hearing, it was neces-
sary for the presiding officer to be replaced and that his replace-
ment be -.nstructed to disregard the requirement of the regulations.
This motion lacks merit and is denied.  Among other things, Re-
spondent did not give any reasons in its motion to explain how the
presiding officer's consideration of the penalty guidelines denied
it due process. In its brief on appeal. Respondent supplies some
clues in that regard, but the reasons given are unconvincing.  Re-
spondent argues that the presiding officer's consideration of the
guidelines would be the same as a prosecutor arguing in federal
court, in a criminal case, that the court is bound by the prosecu-
tor's recommendation for a fine (or the court would have to explain
the reasons for not adopting the prosecutor's recommendation).  Such
a comparison is inapposite.   Among other things, it fails to recog-
nize that the penalty guidelines constitute an interpretation of
the statutory factors set forth in TSCA §16(a)(2)(B) and that the
Administrator,  not the Complainant,  has specifically directed the -
presiding officer in §22.27(b) of the procedural rules to give that
interpretation consideration.  Therefore,  since the presiding offi-
cer is obviously bound to apply the statutory factors, the Admini-
strator's direction to him to give consideration to a particular
interpretation, i.e^, the penalty guidelines, is the same, in terms
of its legal effect,  as any other regulation the Administrator might
issue construing the statute; and, in that  regard,  the presiding
officer properly observed that the requirement to give the guidelines
consideration is "-entirely in accordance with the settled .rule that
agency policy statements interpreting a statute are entitled to be
given such weight as by their nature seems  appropriate.  [Citing
Skidmore v.  Swift & Co.,  323 U.S.  134,  140  (1944).3" I.D.  at 9.  Re-
spondent cites1 no authorities, judicial,  administrative or otherwise,
which either directly support its  contentions or refute the pre-
siding officer's holding.   Even if there were merit to Respondent's

(Footnote No.  6 continued on p.  11).

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                                 11


 argues that  the  penalty imposed by the presiding officer is

 excessive  and  does  not  reflect substantial mitigating factors.

      The presiding  officer disagreed with both the Complainant

 and  the Respondent.   He concluded that there were a. number of

 aggravating  factors weighing  against Respondent's contention

 that it should not be assessed any penalty.   However,  he also

 found that Complainant's  estimate of the  probable damage that

 would result from the violations was too  high,  and,  therefore,

 he reduced the penalty  proposed by Complainant.   Since the pre-

 siding officer's decision is  not unreasonable insofar as it re-

 jects Re-.ponder.t' s arguments  for an additional  reduction in the

 penalty, and,  furthermore,  since Respondent,  as  previously stated,

 did  not appeal the presiding  officer's decision,  there is  no need

 to discuss that argument .any  further.   Similarly,  there is no

 compelling reason to  address  Respondent's  contentions  regarding

 the  effect of  the guidelines  on the presiding officer's ability
                                         y
 to render a fair and  impartial  decision.-     Therefore,  the
 (Footnote No. 6 continued).— -: ~    -~ ~	       -   -

 contention, disqualification of the  presiding officer would not be
 necessary to correct any resulting unfairness.  The presiding
 officer is not a lay juror whose ability to be  impartial is irrep-
 arably damaged from having given previous consideration to highly
 prejudicial material.  The presiding officer is an experienced
 Administrative Law Judge and, until  shown otherwise, is presumptive-
 ly able to disregard prejudicial material if instructed to do so.
 Thus, the alleged unfairness could be cured short of disqualifying
 the presiding officer, and, therefore,  for that reason alone, the
 motion is ill-conceived.

2.1 Ibid.  Also, the presiding officer denied a motion filed by Re-
 spondent asking the presiding officer to withdraw from the proceeding
 because of the alleged prejudicial effect of the penalty guidelines.

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                                12

 discussion below only addresses the presiding officer's conclu-

 sion that Complainant's proposed penalty assessment was too high.

     The presiding officer concluded that the Complainant over-
                                                    !/
 estimated the probablity of damage (vertical axis).    Specifi-

 cally, he concluded that since the transformers were  "in service,"

 rather than in storage or otherwise not being used, damage was

 less likely to result:

             Complainant's proposed penalty of $21,000 for
          the recordkeeping violations is based on an estimate
          of probable damage which I believe is not justified
          under the facts of this ca'se. [Footnote omitted.]
          Here the transformers which accounted for the bulk
          of the PCB's involved, were all in active service.
          The recordkeeping requirement appears to be directed
          mainjy toward insuring that PCB's will be disposed
          of ir. accordance with the regulatory requirements, so
          that the potential for harm is likely to be greatest
          in situations where PCB's are being removed from ser-
          vice, or stored and disposed of without the mainten-
          ance of proper records.   Here the gravity of the
          offense lies not so much in the potential for harm as
          in Respondent's neglect to carry out its responsibil-
          ities under the PCB rule. ^/

     Complainant argues that there is no basis for making a dis-

tinction based on the in-service or out-qf-service-status of the
  /
transformers.   In fact,  Complainant even goes so far as to argue

that in-service transformers present a greater danger than out-

of-service transformers.   According to Complainant,  "PCB items

which are in-service  clearly present a greater risk of rupturing

or leaking,  and subsequently contaminating workers or the environ-

ment,  than items in storage for disposal."  EPA App.  Br.  at 12.

I disagree with this  analysis.   While in-service PCB items
(3/  See text  at  pages  3-6  for  discussion of the penalty guidelines

9/  I.D.  at 25.

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                                  13


 probably  do present a greater  danger of rupturing than  out-of-

 service items, it does not  follow from that fact that the  risk

 to humans and the environment  is  necessarily greater.   Out-of-

 service items which go unreported may well  be handled or disposed

 of by persons who have no appreciation or concern for the  hazards

 posed by  improperly handled PCBs.   Indeed,  it is probably  safe

 to assume that such items will be handled improperly, possibly to

 the detriment of the environment  or human health.   Thus, I cannot

 accept Co.nplainant's contention that'in-service  items are  in-

 herently  more harmful than out—of-service items.   At the same

 time, ho.'ever, there is no basis  in the  record for concluding  that

 the converse is true,  namely, that  in-service items are, as a

 general rule,  inherently safer than out-of-service items.  However,

 I  do not  construe the presiding officer's decision as advocating

 such a general rule.  Instead,  he merely held, based on the facts

 of this particular case,  that the probability of  damage was less-

 ened because of evidence tending  to  show'that  Respondent followed

 reasonable procedures  for cleaning  up  spills  and  leaks.   Specifi- . .

 cally,  the presiding officer found  that:

          The  greatest risk of exposure would  appear to be
          small quantities of PCBs  leaking  from the trans-
          formers.   [Footnote omitted.]  Respondent, also,
          was  not completely oblivious to the  PCB  rule re-
          quirements.   Since it had properly  stored some PCB
          cleanup materials, the possibility that  it would
          use  the required care in  cleaning up spills or
          leaks or disposing of its transformers,  cannot be
          entirely dismissed.  10/

Accordingly,  I find no error in the fact that the  presiding
10/ Id. at 14.

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                               14


 officer made a distinction between in-service and out-of-service

 items  in  reducing the penalty proposed by Complainant.  The  dis-

 tinction  was based on the particular facts of this case and  is

 supported by the evidence in the record.  Thus, were there

 nothing else to consider here, I would affirm the decision out-

 right; however, a modification is in order because of Respond-

 ent's  continuing failure to prepare annual documents for 1978

 and 1979.

     Complainant's position that penalty reductions should not
                                   . ^-   »
 be made as long as an uncorrected violation is outstanding is
                           !!/
 well founded ir. this case.     There is no reason to believe that

 Respondent is unable to bring its records into full compliance

 by preparing annual documents for 1978 and 1979.  Respondent pre-

 pared  an  annual document for 1980 by obtaining the necessary in-

 formation from routine corporate documents,  specifically, asset

 ledgers maintained for financial reporting purposes, and service

 and operating manuals kept for maintenance purposes.  Tr. 218-222.

 These  same information sources can be consulted, presumably, for
ll/ Although each case must be decided on the basis of its own par-
ticular facts and circumstances,  the full amount properly imposed
under the penalty guidelines,  through use of the matrix, should not
be reduced, ordinarily, if the violation remains uncorrected.  Ob-
viously, if the violation is not  susceptible to correction, imposi-
tion of the full penalty for noncompliance would be unjust if other
considerations warrant the reduction;  imposition of the full penalty
in that instance would merely serve the. goal of punishment, without
regard to the basic objective of  the civil penalty scheme, which is
to "to deter through regulation,  not reprimand through punishment."
In re Briggs & Stratton Corporation,  101 ALC 116,  119 (TSCA Appeal
No. 81-1,  decided February 4,  1981).

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                                 15


                12/
 1978  and  1979.

      Although the presiding  officer  acknowledges the fact that

 the annual documents  for  1978  and 1979  are still missing, it is

 unclear how this fact affected his computation of the proper

 penalty,  if at  all.-   It is clear, however,  that a failure to

 achieve full compliance is a matter  which  can be considered under

 TSCA  §16(a)(2)(B), which, among  other things,  authorizes  the

 Agency to take  into a account  "such,  other  matters as justice may

 require.1'  Therefore,  restoration of the full penalty for failing

 to correct the  violation  is  not  precluded  here.   However,  Respond-

 ent should be given the opportunity  to  supply the missing docu-

 ments before the full  penalty  is imposed.   If the documents are

 in fact furnished and  prepared in a  satisfactory manner,  the

 penalty will be reduced to the amount recommended by the  pre-

 siding officer.   Accordingly, the full  penalty proposed by Com-

 plainant for the annual document violations,  $21,000,  is  hereby

 assessed against -Respondent;  subject, however,  to the  condition

 that the penalty shall be reduced to the amount  assessed  in the

 initial decision, i.e., $5,250, if the  reports  are submitted as

hereinafter provided.

     The second  matter appealed by Complainant  is  the  amount of

 the penalty imposed by the presiding officer  for  Respondent's
12/  Respondent notes in its brief the ease with which it was able
to gather the necessary data from these sources: "[T3he bulk of
information required in an annual document was quickly supplied
from company records."  B&H App. Br.  at 26.

-------
                                16


marking violations.  None of Respondent's PCB transformers bore
                            ll/
the required warning label.     Instead, the only marking con-

sisted of the manufacturer's nameplate informing the reader of

the fact that the contents were Pyranol or Askarel, two common

tradenames for PCB dielectric fluid.  The presiding officer

properly rejected Respondent's contention that these nameplates

mitigated the potential for harm:

               Respondent in attempting to minimize the vio-
          lations argues that since"the transformers had name-
          plates indicating that they contained Pyranol or
          Askarel, which are trade names for PCB dielectric
          fluid, persons would be warned that the transformers
          did contain PCBs. A similar argument was made in the
          case of Briggs & Stratton Corp.,  TSCA Appeal No. 81-1,
          (Pel: ruary 4,1981), and rejected by the Judicial Offi-
          cer for the obvious reason that the manufacturer's
          nameplate does not like the EPA-approved mark contain
          instructions  about the proper disposal of PCBs.  Briggs^
          & Stratton Corp., supra  at 29.   Nor does the nameplate
          like the EPA-approved mark contain a clear and unmis-
          takable warning that PCBs are a toxic environmental
          contaminant requiring special handling so that all
          persons Cnot  just those  who may have special knowledge
          regarding the dangers of PCBs]  who do come in contact
          with leaks or spills from the transformers will not
          only know that PCBs are  present but they will act to
          avoid any injury to themselves  or to the environment. 14/

     Nevertheless, the  presiding officer reduced the penalty pro-

posed by Complainant by 25 percent,  i.e.,  from $10,000 to $7,500.
13/  40 CFR §761.20(a)(1980)  requires  an  EPA-approved warning label
to be affixed to PCB transformers  and  containers.   40 CFR §761.44
(1980)  prescribes  the required  format  of  the  warning label and
contains minimum size limitations,  color  requirements, a "caution,
contains PCBs" notice,  and  directions  to  contact EPA for informa-
tion regarding proper dispo'sal.

14/  I.D.  at 11-12.

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                                  17



 This was done because, in his estimate of the probability of


 damage, the risks were primarily  of small amounts of PCB's


 leaking from the transformers.  As previously indicated,


 there was evidence showing that Respondent had followed proper


 cleanup practices in the past, thus suggesting that the proba-•


 bility of harm in this instance was smaller than the absence of

                                             li/
 properly marked transformers would indicate.     The. reduction


 was only 25 percent because there we're no other compelling or


 valid reasons for making further reductions, and the presiding


 officer proper\y rejected Respondent's arguments to the contrary.


     But for respondent's failure to achieve full regulatory


 compliance (by not preparing annual documents for 1978 and 1979),


 I would not raise the penalty assessment to $10,000 for the mark-


 ing violations.   The presiding officer's penalty reduction is


 not otherwise of sufficient magnitude to call its validity into


 serious question.   A penalty of $10,000 was proposed by the


 Complainant to reflect the "significant" nature of the violation


 (horizontal axis)  and its "mid-range—3" characteristics in terms


 of probability of damage (vertical axis).  See matrix at page 5,


 supra.   The presiding officer,  however,  disagreed with Complain-


 ant's estimate of the probability of damage and lowered the pro-


posed penalty to $7,500.  .This lower amount does  not represent a


 fundamental departure from the penalties authorized by the penalty
15/  See text at pages 3-6 for a discussion of the penalty
guidelines.

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                                 18






guidelines or from Complainant's characterization of the vio-




lation.  This is made evident by the fact that lowering the



penalty by a single factor on the matrix — for example, by




changing the probability estimate from "mid range—3" to "mid



range—4" — would result in a reduction of the penalty from




$10,000 to $6,000.  The presiding officer's lowering of the




penalty to $7,500, of course, falls short of this amount.




     There is nothing in the guidelines which suggests that a
                                   •



presiding officer is required to assess a penalty in an amount




which ir identical to one of the amounts shown in the matrix —




for example,  S^.0,000 or $6,000.   The guidelines were never in-



tended to establish an inflexible policy which would force the




presiding officer to elect between one amount or the other, de-



pending upon which amount more closely approximated his estimate



of the probability of damage (vertical axis).   Instead, it is




better to view the amounts shown in the matrix as points along a




continuum,  representing convenient benchmarks for purposes of



proposing and,  in some instances,  assessing penalties.   Accord—~~




ingly,  if warranted by the circumstances,  other points along




the continuum may be selected in assessing a penalty.  Although




the guidelines do not purport to give specific guidance on how




this should be done,  it seems evident that,  at a minimum,  the




additional  evidence adduced at a hearing can be used as a basis



for justifying deviations ("up or down)  from the amounts shown




in the matrix.   In other words,  by viewing the amounts  shown

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                                  19
 in the matrix  as  benchmarks  along  a  continuum,  a range of


 penalties  — for  example, between  $10,000  and $6,000 — becomes


 available  to account  for, among other  things,  some of the less


 tangible factors  which  the presiding officer is in a unique


 position to evaluate.   Moreover, the existence  of this range


"constitutes tacit acknowledgment of  the  fact that,  no matter how


 desirable, mathematical precision  in setting penalties is im-


 possible.  Consequently, I conclude 'that,  at the very least, the
                                   . -w.

 presiding  officer in  reducing the  proposed penalty from $10,000


 to $7,500  was Corking within a range of  penalties which is both


 authorized by the guidelines and involves  the exercise of a sub-


 stantial amount of discretion.  Accordingly,  absent unusual or


 other  compelling  circumstances, it would be  inappropriate on


 appeal to  change  the penalty if it falls within this  range.  Since


 no such circumstances are presented here,  I  decline to substitute


 my judgment for that of the presiding officer's.  Nevertheless,


 because of Respondent's failure to prepare annual documents for


 1978 and 1979,  the full penalty proposed by  Complainant,  $10,000,


 will be assessed  against Respondent; subject, however,  to the


 condition that the penalty will be reduced to the amount  assessed


 in  the initial decision, i.e^, $7,500,  if the reports  are sub-


mitted as provided below.

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                                 20


 Conclusion

     For the reasons stated, the presiding officer's  decision  is
                                       16/
 affirmed in part and modified in part.     For the  annual  docu-

 ment violations, a civil penalty in the total amount  of  $21,000

 is assessed, consisting of $10,000 for violations occurring  at

 Respondent's Lincolnwood North facility, $10,000 for  violations

 at its Hibbard facility and $1,000 for violations at  its Lincoln-

 wood Souih facility.  For the marking violations (failure  to
                                   V.
 display approved warning labels), a civil penalty in  the amount

 of $10,COO is assessed.  If Respondent submits to Complainant

 completed annual documents for 1978 and 1979 for these facilities

 within thirty. (30)  days of service of this final decision, the

 amounts above for the annual document violations shall be  reduced,

 respectively, for eacK submission,  to the amounts assessed by  the

 presiding officer in his initial decision,  i.e., Lincolnwood North
                                                         !!/
 ($2,500),  Hibbard ($2,500) and Lincolnwood South (_$250).

 Similarly,  if Respondent submits completed annual documents  for

 1978 and 1979 for each of the facilities,  the amount of  the  civil ™"

penalty for the marking violations  shall be reduced to the amount

assessed by the presiding officer in  his initial decision, i.e.,

$7,500.  Payment of the civil penalties assessed against Respondent
16/  Respondent's request for oral argument is denied.

17/  Payment of the full  penalty (for failing to submit the annual
documents on or before the deadline),  rather than the reduced
amount,  shall not relieve Respondent  of responsibility for prepar-
ing the  documents or otherwise preclude the Agency from taking
further  enforcement action under the  Act.

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                                 21
shall be made within sixty  (60) days of the service of this

final decision and shall be forwarded to the Regional Hearing

Clerk.  Payment shall be by cashier's or certified check pay-

able to the United States of America.

     So ordered.
                                 Ronald L. McCallum
                              Judicial Officer (A-101)
Dated:  Q£C 2   1983

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                       CERTIFICATE  OF  SERVICE
      I  certify  that  copies  of  the  foregoing Final Decision in the
 matter  of  Bell  & Howell Company, TSCA-V-C-033,  034,  035,  were sent
 to the  following persons  in the manner  indicated:
 By  certified mail,
 return  receipt requested;
By  1st  class mail,
postage prepaid:
By hand delivery:
Louis M.  Rundio,  Jr.,  Esq.
McDermott,  Will  & Emery
111 West  Monroe  Street
Chicago,  IL 60603

Craig Benedict,  Esq.
U.S. Attorney's  Office
P.O. Box  1258
Federal Building
Syracuse, NY 13201

Mary Langer
Regional  Hearing Clerk
EPA, Region V
230 South Dearborn St.
Chicago,  IL 60604

Robert Schaeffer,  Esq.
Office of Regional  Counsel
EPA, Region V
230 South Dearborn St.
Chicago,  IL 60604

Honorable Gerald  Harwood
Office of Administrative  Law
 Judges (A-110)
EPA Headquarters
401 M Street, S.W.
Washington,  DC 20460
                               M. Gail Winqo
                               Secretary to the
                               Judicial Officer
Dated:   DEC 2  1983

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26

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              UNITED STATES  ENVIRONMENTAL PROTECTION ARLHCY


                         BEFORE THE ADMINISTRATOR
                                                                       /•
                                                                      c .
 In the Matter of                    )
                                    )
     Rinco Casting Co.,             )  Docket No. TSCA-82-1089

           Respondent               )


 1.   Toxic Substances Control Act - PCBs - Owner of diecasting machines
     using PCB hydraulic fluid found to have violated 40 C.F.R. 761.40(a)(7),
     by not marking its machines, and to have violated 40 C.F.R. 761.20(a),
     for its unauthorized use of PCBs in a manner other than in a totally
     enclosed manner.

 2.   Toxic Substances Control Act - PCBs - In determining a violator's degree
     of culpability with respect to the assessment of a penalty, the test is
     not what the violator actually knew, but whether it should have known
     of the relevant PCB requirements  and their  applicability to its
     operations.

 3.   Toxic Substances Control Act - PCBs - Defense of lack of culpability
     based on claim that owner of diecasting machines containing PCB fluid
     did not know of the requirements of the PCB rule and that the fluid
     contained PCBs rejected.  Publication of the PCB Ban Rule in the Federal
     Register Notice is sufficient notice to the affected public of the
     requirements of the rule.  Since  the owner  had been purchasing hydraulic
     fluid over many years and did not know its  chemical  composition, it
     should have tested the hydraulic  fluid for  its PCB content.

 4.   Toxic Substances Control Act - PCBs  - Proposed penalty of $35,000 reduced
     to $16,250, because of violator's promptness and thoroughness  in elimina-
     ing the hazards created by its PCB contaminated hydraulic machines, and
     because it  expended a substantial  sum going beyond the requirements of
     the rule in order to ensure that  none of its diecasting machines contain
     PCBs  of 50  ppm or more.
Appearances:
              George Ciampa,  United  States  Environmental  Protection
              Agency,  Region  -I,  Boston, Massachusetts, for  Complainant,

              Gregory  L.  Benik,  Hinckley X  Allen,  2200 Fleet  National
              Bank  Building,  Providence, Rhode  Island, for  Respondent.

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                              INITIAL  DECISION



      This  is  a  proceeding under the Toxic  Substances Control Act  ("TSCA"),

 Section 16(a),  15 U.S.C. 2615(a),  for the  assessment of  civil  penalties

 for violation of  the  rule promulgated under  Section 6(e) of the Act, 15
                                i
 U.S.C.  2605(e), governing the manufacturing, processing, distribution,

 and use of  polychlorinated biphenyls  ("PCB Ban Rule"), 40 C.F.R.  Part
     I/
 761.   The  complaint  issued by the Regional  Administrator of the  United

 States  Environmental  Protection Agency charged-Respondent, RIOCO  Casting

 Co., with failing  to  mark hydraulic systems  using PCB hydraulic fluid,

 as  required by 40  C.F.R. 761.40(a)(7), and with the unauthorized use of

 PCBs in a manner  other than a totally enclosed manner in violation of 40

 C.F.R.   761.20(a), since RIDCO did not test the hydraulic fluid in its

 hydraulic systems  for its PCB content as required by 40 C.F.R.  761.30(e)(1).

 A penalty of $35,000 was requested, $15,000 for failure to mark, and $20,000

 for using PCBs in  a manner other than totally enclosed.  RIDCO  answered and

 admitted that its hydraulic systems using PCB hydraulic fluid were not

 marked  in compliance with the PCB Ban Rule, and that it did not test the
]_/  Section 16(a) of the Act, 15 U.S.C. 2615(a), provides in pertinent
part, as follows:

      (a) Civil.  (1) Any person who violates a provision of section 15
shall be liable to the United States for a  civil  penalty in an amount
not to exceed $25,000 for each such violation.  Each day such a violation
continues shall, for purposes of this subsection, constitute a separate
violation of section 15.

Section 15 of the Act, 15 U.S.C. 2614, provides in pertinent part,  that
."it shall be unlawful  for any person to (1) fail  or refuse  to comply
with  . . . (B) any requirement prescribed by section .  . .  6 [15 U.S.C.
2605], or (c) any rule promulgated under section ...  6 .  ..."

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                                     2

 hydraulic fluid as  required  by  the  rule.   It alleged, however, that the

 violations were inadvertent,  were done without knowledge, and that the
                      y
 penalty was excessive.          "

      A hearing was  held in Providence, Rhode Island on October 4, 1983.  -

 Thereafter, each party submitted proposed  findings of fact, conclusions  of

 law, and a proposed order together  with a  supporting brief.  On consideration

 of the entire  record and the  briefs  submitted by the parties, a penalty  of

 $16,250 is assessed.  All proposed  findings and conclusions inconsistent

 with this  decision  are rejected.

                              Findings of Fact

 1.   RIDCO operates a custom  zinc diecasting business in Pawtucket, Rhode
                                               I/
 Island.   Complaint, Par. 1, and answer; Tr. 51.

 2.   In  its fiscal year immediately  prior to that in which the date April 28,

 1982,  occurred,  RIDCO's gross sales  (total  business revenue from all  operations)

 exceeded $4 million.  Complaint, Par. 2,  and answer.

 3.    From  1970  to 1972, RIDCO purchased PCBs from Monsanto.   Complaint,

 Par.  4,  and answer.

 4.    On  April  28, 1982, RIDCO's facility  was inspected by a duly designated

 representative  of the Administrator of the  United States Environmental

 Protection  Agency ("EPA"),  Donald K. Fulton.   Mr.  Fulton is  a compliance

 auditor  for  Versar, Inc.  which is under contract  with  the EPA to  do TSCA
2/  RIDCO also alleged that the definition of "totally enclosed
manner" in the PCB Ban Rule, 40 C.F.R.  761.3(hh),  was  in  excess of
delegated congressional authority.   That  issue,  however,  may not be
considered in this proceeding.   See the decision of  the Judicial  Officer
in The Dow Chemical Company, Docket No. TSCA (16(a))-l  (July 28, 1982).
In its prehearing letter, RIDCO agreed  that  Dow  precludes consideration
-of its claim that the rule is invalid  in  this enforcement proceeding,
but said that it was reserving  its  right  to  place  on the  record its position
as to the invalidity of the rule.

3/  "Tr." refers to the transcript  of the hearing.

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 inspections  for the EPA.  Complaint, Par.1 3, and answer; Conplainant's



 Exhibit  2;  Tr. 12.



 5.    Fulton  found sixteen diecasting machines owned and operated by  RIDCO.



 Each  of  these machines had a hydraulic reservoir containing hydraulic



 fluid used to operate the machine.  Tr. 16.



 6.    The hydraulic fluid in eight of these diecasting machines contained



 PCBs  in  excess of 50 parts per million (ppm).  The PCB content ranged from



 5,000 ppm to 270,000 ppm.  Complaint, Par.  6, and answer; Complainant's Ex. 2.



 7.    The hydraulic fluid containing PCBs-was in use in RIDCO's diecasting



 machines prior to November 1, 1979.  Complaint, Par. 6, and answer.



 8.    The eight diecasting machines containing the PCB fluid were not marked



 with  the Targe PCB Mark ("ML") as required  by the PCB Ban Rule, 40 C.F.R.



 761.40(a)(7).  Complaint, Par. 7, and answer.



 9.    RIDCO did not test the hydraulic fluid of each of the eight diecasting



 machines containing the PCB fluid by November 1,  1979, and at  least annually



 thereafter, for the concentration of PCBs  in said hydraulic fluid,  as required



 by 40 C.F.R. 761.30(e) (1).   Complaint,  Par.  8,  and  answer.



 10.   All of RIDCO's diecasting machines leak and  this was  known by  RIDCO.



 Tr. 91, 103.



 11.   The EPA inspector  saw evidence of  hydraulic  fluid leaking from the  eight



 diecasting  machines  containing PCBs.   The existence  of leaks was  disclosed



 by the presence  of oil  on top of  the machines and of fresh  absorbent  material



on the machines  and  on  the  floor  beneath the  machines.   Tr. 22-24,  30,



 34-37, 40-41; Complainant's  Exhibit  2.

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 12.  On Kay 27, 1982, the EPA sent RIDCO a written  notice of violation in-


 forming RIDCO of the violations alleged in the complaint.  Complaint, Par.


 10 and answer; Complainant's Exhibit 4.


 13.  Upon being advised that the hydraulic fluid in the eight diecasting


 machines contained PCBs in excess of 50 ppm,  RIDCO  immediately undertook to


 test, drain and properly dispose of the PCB fluid.   Tr. 58-60, 135-38.


 14.  In addition, RIDCO drained and disposed  of the hydraulic fluid in a


 ninth machine, which contained PCBs at a concentration  of 48 ppm.   Tr. 65.


                        Discussion and Conclusions


     RinCO does not question the violations with which  it is charged except


 to assert that the EPA has not proved  that RIDCO's  diecasting machines were


 operated in a manner other than totally enclosed.   "Totally  enclosed manner"


 is defined as "any manner that will  ensure that  any  exposure of  human beings


 or the environment to any concentration of PCBs  will  be insignificant; that


 is, not  measurable or detectable by any scientifically  acceptable  analytical


method."  40 C.F.R. 761.3(hh).  RIDCO  argues  that the EPA's  proof  is de-


ficient  since the EPA inspectors did not take  samples of  the fluid  on top


of the machines or of the absorbent material  in  the  immediate area  of the


machines and test them for their PCR content.   It is  reasonable  to  infer,


however, that hydraulic fluid  leaking  from the machines  accounted  for the


presence of  the fluid on  the machines  and  underneath the  machines  (as


evidenced by the absorbent material),  particularly  in view of the  uncon-

                                                       !/
troverted  evidence  that diecasting  machines always leak.     RIDCO has


produced no  evidence  indicating  that the fluid could have come from  some


other source besides  the  diecasting machines.  It can also be  reasonably
4/  See Findings  of  Fact  Nos. 10 and 11 supra.

-------
 inferred,  given the  large concentration of PCBs found in the hydraulic

 fluid, "that  PCBs'v/ould  be present in measurable or detectable quantities
                    I/
 in  the  leaked  fluid.     In short, the record does establish that RIDCO's

 diecasting machines were using PCBs in a manner other than a totally'
                                               I/
 enclosed manner as defined in the PCB Ban Rule.

      Accordingly, it is  concluded that RIDCO has violated 40 C.F.R.

 761.40(a)(7),  by not marking its hydraulic systems using PCB hydraulic

 fluid with the large PCB Mark ("ML") as required  by 40 C.F.R.  761.40(a),

 and has violated 40 C.F.R. 761.20(a), by its unauthorized use of PCBs

 in a  manner other than in a totally enclosed manner.

                         The Appropriate Penalty

      The remainder of RIDCO's objections are directed to the penalty proposed

 by the EPA of  $15,000 for failure to mark the PCB hydraulic systems, and of

 $20,000 for using PCBs in hydraulic systems  that are not totally enclosed

 without testing for PCBs in the hydraulic fluid.  RIDCO contends that these

 penalties do not properly take account of the statutory criteria for assess-

 ing penalties under TSCA, Section 16(a), and are not in accord  with the EPA's

 PCB penalty policy.
_5/  The detectable limit of PCBs in oil  samples is one ppm.   Tr.  47.   Here
there is no evidence whatever that  the  leaked  fluid would  have  a  lower
concentration of PCBs than the fluid in the machines.

_6/  As previously noted, supra, n.  2,  RIDCO's  defense  that the  EPA's
definition of "totally enclosed manner" is  in  excess of congressionally
delegated authority is not an appropriate defense  in this  proceeding  and
therefore has not been considered.

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      The statutory  criteria  for assessing penalties under TSCA, Section  16(a)

 are listed  in  Section 16(a)(2)(B), 15 U.S.C. 2615(a)(2)(B), which provides  '

 as follows:    .  •

           In determining the amount of a civil penalty, the Administrator
          shall take into account the nature, circumstances,"extent, and
          gravity of the violation or violations and, with respect to the
          violator, ability to pay, effect on ability to continue to do
          business, any history of prior such violations, the degree of
          culpability, and such other matters as justice may require.

      To  provide guidance on the assessment of penalties under Section 16,

 the EPA  enforcement staff has issued guidelines setting forth the general

 policies  it will follow and has supplemented these guidelines with a
                                                                        I/
 specific  policy for assessing penalties for violations relating to PCBs.

 The procedural rules for these proceedings require that I consider the

 guidelines and PCB penalty policy in determining the appropriate penalty,

 and that  if I assess a penalty different in amount from that proposed in
                                                *J
 the complaint, I must give my reasons  therefore.

      The  PCB penalty policy uses a matrix to establish an initial  penalty

 based on  the nature, extent,  circumstances,  and  gravity of  the  violation.

 The initial  penalty can  then  be adjusted upwards  or downwards  depending

 upon  consideration  of the  other statutory factors,  i .e.,  culpability,

 history of such violations, ability to pay,  ability to continue in business,
                                             I/
 and  such  other matters as  justice  may  require.

      The  matrix classifies violations  involving  1,100  gallons  or more of liquid

 PCBs as  a major violation.   The EPA treats  RIDCO's  violation as  one

 involving nearly 1,320 gallons  of  PCB  fluid.   It  arrives  at  this  figure  from
7/  See 45 Fed.  Reg.  59770-59783.

§/  40 C.F.R. 22.27(b).

9/  45 Fed. Reg.  59777.

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                                     7

 :the fact that the PCS fluid initially drained from the eight machines was
 :             .                         10/
 stored in twenty-four 55 gallon drums.    RIDCO contends, that the drums

 were only filled to 75 percent of their capacity, which would reduce the

 Itotal amount to less than a 1,000 gallons.  Mr. Cohen's testimony, however,

 ion which RIDCO relies, does not square with the testimony of Mr. Leo, of
 i
 ;the Rhode Island Department of Environmental  Management,  who had looked in-

 iside some of the drums and found them filled  to one,  two  or three inches
              1L/.          "                     -
 from the top. -   The figure of 1,320 gallons is also consistent with the
 i                            . .
 Evidence as  to the capacity of the  reservoirs on the  machines.   It is

 true that Mr. Rapaporte  testified that-the machines could operate without
 i                                        ii/
 /filling  the  tanks  to their  full  capacity.      That testimony, however,
 i
 is unconvincing  as proof that  the levels of fluid were  generally much

 lower than the capacity  of  the tanks in view  of  the testimony of the

 EPA Inspector that  he  looked inside the reservoirs of two  of the machines and
                                    !!/
 saw that  they were  both  nearly full.    As  to  the capacities of  the tanks,

 there is  some conflict as to whether all the machines had  a 200  gallon

 capacity  as  the  EPA  inspector  was told, or whether some may have  had  a
                                     !!/
 capacity  of  as little  as  140 gallons.      The  truth probably lies  somewhere

 in  between.   Assuming, then, an average volume of 170 gallons per tank for the

 eight tanks  (midway between 200 and 140), there would be a total of 1,360
JJ)/  Tr. 129-30.

Jjy  Tr. 140.

]_2/  Tr. 99.

JJJ/  Tr. 19.

14/  See Tr. 21; Complainant's Exhibit 2; Tr.  99,  101-02.   Mr.  Rapaporte
TTrst said that the capacity could range from  170  to 201 gallons.,  and
la.ter appeared to change these figures to 140  to 200 gallons.   Tr.  99,
101-02.

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                                    8  '

 gallons,  or  about the same quantity as is indicated by the capacity of

 the twenty-four  55  gallon drums, into v.'hich the fluid was drained.  Hence,

 it is  concluded  that the violation was properly classified as a major

 violation.

     With respect to the probable harm from the violations which forms the   .

 other  axis of the matrix, Complainant classifies the marking violation as. a

 level  three  violation and the unauthorized use as a level two violation.

 The  large PCB mark  contains a warning that PCBs are present, and must be

 specially handled and disposed of, and also provides a reporting point in

 the  event  of an  accident or spill.   The potential  injury to human beings and

 the  environment  inherent in not making such information available to those

 who  come  into contact with the fluid fully justifies classifying the absence

 of the mark  at level three.   As to the failure to test and drain the hydraulic

 systems,  the EPA imposed these requirements in order to reduce the exposure

 of man and the'environment to the highly toxic PCBs in as short a time as
                                                           15/
 possible  without unduly disrupting  the diecasting  industry.      EPA points

 out  that  by  failing to test and drain the hydraulic systems, RIDCO has

 extended  the use of a large  volume  of PCBs in  unenclosed  systems and the

 risk of exposure that this  entails  for a  longer period than  if the testing
                           V6/
 and  draining had been done.      Such consequences  justify the level  two

 classification for this  violation.

     It remains, then,  to consider  the statutory  factors  of  RIDCO's  ability

 to pay, the effect of the penalty on RIDCO's ability to continue to  do

 business, any history of prior such  violations, the  degree of culpability,

 and such other matters as justice may  require.
]_5/  44 Fed. Reg.  at 31534-535.

16/  Complainant's post trial  brief  at  10.

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                                     9


      RIDCO does not claim that the $35,000 penalty is beyond its ability to


 pay or would affect its ability to continue to do business.  There is also


 no evidence of any prior violations by RIDCO of this nature."  According


 to the PCB Penalty Policy,  however, the absence of prior violations would


 not be a reason for decreasing the initially determined penalty, but, instead,


 the existence of prior violations  would be a grounds for increasing the initial

         !!/
 penalty.


      To show its lack of culpability, RIDCO argues that prior to May 27,'1983,


 it did not know of the possible existence  of PCBs in its hydraulic fluid.   To


 support this claim it points  out that it has always purchased hydraul'ic fluid


 by its trade name, such as  Pydraul  F-9 or  Pydraul  312-C, on the  basis of

                                               W

 recommendations made  by the machine suppliers.      RIDCO further asserts  that


 there is no evidence  that the drums identified  the fluid as containing PCBs


 or that Monsanto,  the supplier of the product,  distributed  any product safety


 data  sheets which  indicated the existence  of PCBs.   Finally,  RIDCO contends


 that  it never received any  communication from Monsanto  or the EPA regarding

                                                      I!/
 the possible existence of PCBs in the hydraulic  fluid.      None  of  these


 allegations is  controverted by the  EPA.


      The record does  support  RIDCO's  claim  that  it  was  unaware that  its


 hydraulic fluid contained PCBs.  The  test,  however,  is  not  what  RIDCO


 actually knew,  which  is  what  RIDCO  seems to  assume,  but  whether  RIDCO should


 have  known  of the  relevant  PCB requirements  and  their applicability  to its

            20/
 operations.      The published  rule  and  preamble  thereto,  of which  I  may
 YJJ   45  Fed.  Reg. 59773-774 (September 10, 1980),


"1_8/   See Tr.  55; Complainant's Exhibit 2.


 1_9/   See Tr.  56, 57, 93, 94.


 207   Penalty  guidelines, 45 Fed. Reg. 59773.

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                                    10

 take official notice, and also the evidence of record, disclose that a

 reasonably prudent and  responsible person in RIDCO's position would have

 known that it should test its hydraulic fluid for its PCB content;

     The PCB Ban Rule itself, 40 C.F.R. 761.30(e), contains specific pro-

 visions for the use of  PCBs in hydraulic systems in a manner other than .

 a totally enclosed manner,"allowing for that use until July 1, 1984,

 subject to certain conditions.  R1DCO knew that  its hydraulic systems  leaked

 fluid and therefore would not have been justified in assuming that its
                                                 !!/
 system was operated in a totally enclosed manner.      Relevant is  761.30(e)(1),

 which provides as follows:

               (1) Each person who owns a hydraulic system that
               ever contained PCBs must test for the concentration
               of PCRs in the hydraulic fluid of each such system
               no later than November 1, 1979, and at least
               annually thereafter.   All test sampling must be
               performed at least three months after the  most recent
               fluid refilling.   When a test shows that the PCB con-
               centration is less than 50 ppm, testing under this
               subparagraph is no longer required.  (Emphasis added).

     The preamble to the PCB Ban Rule  published  with the  rule in the

 Federal  Register, specifically discusses the use authorization for PCBs

 in hydraulic  systems,  including  diecasting machines,  and  stating in

 pertinent part as follows:

                    This authorization is  necessary because a large
               number  of die casting  systems  currently  in  use  were once
               filled  with PCB hydraulic fluid.   Although  this use of
               PCBs  has  been discontinued,  equipment  containing  PCB
               hydraulic fluid is still  in service.   Some  systems  have
               been  topped off with non-PCB  fluids,  and others  have  been
               drained and flushed in  an attempt to reduce  PCB contamina-
               tion.   However, systems  may  still  be  contaminated with
               residual  PCB that  either remain after flushing or are
21 /  See supra t  pp.  4-5.

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                                     11

                gradually released from interior surfaces.   As  a  consequence,
                hydraulic systems  can contain  concentrations of PCS ranging
                from less than 10  ppm to thousands of parts per million
                PCB.  **** 22J

      RinCO argues,  that there is  no evidence  that either safety  data  sheets for

 the hydraulic  fluid  or  the  drums  they were  shipped in designated or identified

 the presence of PCBs.   By this I  assume that  RIDCO means that  it has  not been  .

 shown  that there  was a  specific reference to  the  presence  of PCBs  by  their

 chemical  name  of  "polychlorinated biphenyl",  or by the abbreviated term  "PCB".

 What the  evidence does  show is that RIDCO did not trouble  to inform itself

 about  the chemical  composition of the hydraulic fluid it was purchasing

 but knew  that  it  was purchasing from Monsanto a special  type of  hydraulic fluid
                                               23/
 that was  more  fire  resistant  than mineral oil.      As  Mr.   Rapaporte  testified:

           Q.    But  everybody  you  called  was aware he  had PCB's in  his
                hydraulic  diecasting  machines,  wasn't  he?

           A.    [Mr.  Rapaporte] Not  necessarily.   I'll  tell  you  why.
                Some people  had never  converted.   Some  of the diecasting
                machines  were  run  on  mineral oil only,  and  they are prone
                to fire.   Most  of  the  diecasters went  away  from the mineral
                oil because  they were  afraid of  fire  regulations, plus the
                insurance  companies,  I guess,  they forced them to do it.  It
                costs, the mineral   oil costs maybe $1.75  a  gallon,  and the
                Monsanto  oil  was $7.00 a  gallon.   So, they  figured what the
                hell, they are  working out at  the  dollar  and  a quarter gallon,
                so they  stuck and  took a  chance  with the  mineral oil.
                Mineral  oil  never  had  PCBs in  it.   It was the inception of
                Monsanto,  that's the  business  that  put  the  PCB's into the
                oil.   We  changed from  the mineral  oil and spent all this
                money for  the Pydraul  so  we can  make our  plant safer, and
                that's what  we  did.   So all plants  don't  have PCB's. 247
 22/  44 Fed. Reg. 31534 (May 31, 1979).  Similar language was contained in
 tHe proposed rule published about a year earlier, in which the regulation of
 hydraulic systems was limited to diecasting hydraulic systems.  See 43 Fed.
 Reg. 24809 (June 7, 1978).  The final use authorization was changed to cover
 other hydraulic systems besides diecasting machines, and to permit the test-
 ing for PCBs and the use of PCB contaminated systems over a longer period
-of time.  44 Fed. at 31534-535.

_23/  Tr. 55-56, 105-07, 111-12.

 24/  Tr. 111-12.

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                                     12
      Given the  provisions  of  the  PCB  Ban  Rule and its  preamble,  and  the

 fact that RIDCO had  been purchasing hydraulic fluids over  a  period of '
                                    \
 many years of unknown  chemical  composition,  I find that RIDCO, if it had

 read the PCB Ban Rule,  would  not  have  been justified in assuming that its

 hydraulic machines were not subject to regulation.  I  further find that

 it is no defense to  RIDCO, that it did not know about  the  PCB Ban Rule,

 since publication in the Federal  Register was all  the  notice to  which
                   _25/
 RIOCO was entitled.

      RIDCO pleads that  as  a small company it cannot keep abreast of all
                                               26/
 developments in  the  field  of environmental law.      The PCB Ban  Rule,

 however,  was a  very  significant development, issued pursuant to  an express

 congressional direction that PCBs be regulated.   The final  rule was

 published following  publication of a proposed rule,  the receipt  of numerous
                                     27/
 comments,  and several public hearings.    When RIDCO did start inquiring

 about the PCB regulations  it found that other diecasters were familiar with
 25/  See 44 U.S.C. 1508.  In Federal  Crop Insurance Corp.  v.  Merrill,
T3~2 U.S. 380, 384-85 (1947), the Supreme Court stated, "[JJust  as everyone
 is charged with knowledge of the United States Statutes at Large, Congress
 has provided that the appearance of rules and regulations  in  the Federal
 Register gives legal notice of their contents.

 26/  Memorandum and Proposed Findings of Fact of  Respondent,  at  11.

 27/  See the list of Federal Register notices published in the  preamble to
the rule, 44 Fed. Reg.  at 31540.See also the support document  for the
"PCB Ban Rule, PCB Manufacturing, Processing,  Distribution  in  Commerce,
and Use Ban Reflation:  Economic Impact Analysis,  EPA 230-03/79-001
 (March 1979).This document is referred to in the  Federal  Register notice
of the rule, 44 Fed. Reg. at 31514, and, therefore,  is properly  a subject
of official notice.

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                                     13

      28/
 them.     It would appear,  then,  that  RIDCO's ignorance about the PCB reg-

 ulation stens more from deficiencies  in  its  own way of keeping itself-

 informed about environmental  regulations,  than from any alleged inadequacy

 in the notice to the public about  the  existence of the regulation.

      In addition,  to asserting  its lack  of culpability, RIDCO points  to  its  .

 good faith  efforts to remedy  the  violations  once it became  aware  of them.  The

 machines were drained,  cleaned  and refilled  within four months of the EPA's

 notice of violation.   The cleanup  was  done under the  general  guidance of the

 Rhode Island Department of  Environmental'Management.   RIDCO  cooperated fully

 with the State and used procedures  which were to the  fullest  protection of

 both the environment  and the  public safety.   RIDCO did not  stop with  just

 cleaning up  the  eight machines  found to contain  in excess of  50 ppm PCBs,

 but also cleaned up another machine which  contained 48 ppm  PCBs even  though

 it was not  required to  do so  by the PCB rule.   The cleanup cost RIDCO

 over $91,000.   All  of RIDCO's machines now have  PCB levels of  less than
        _29/
 50 ppm.

      Again,  none of RIDCO's claims  are controverted by  the EPA.   The  EPA,

 however, does  argue that the  money  spent in  cleanup costs should  be dis-

 counted as  a  mitigation  factor, because of the testing,  draining  and  re-

 filling  costs  alleged to be saved  by RIDCO,  and  because  many dollars  spent
                                    30/
 would  have gone  to  pay  taxes  anyway.     Whether there  were any savings on
 28/   See Mr. Rapaporte's testimony, Tr. 111-12, 121.  Mr. Cohen's subsequent
 testimony, Tr. 127-29, can be read as qualifying Mr. Rapaporte's testimony
 about the extent to which the PCB regulation was known among diecasters.
 Mr. Rapaporte's testimony, however, seemed to be more spontaneous account
 of what RIDCO was told by other diecasters, and to more accurately reflect
"the facts.
^9/  See Tr. 56, 57, 93, 94; Respondent's Exhibit I.

30/  See Complainant's Post-trial brief at 10.

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                                    14

 testing  and  draining and filling the machines is purely speculative.   Under

 the regulation  itself, RIPCO v;ould have had to test for concentrations  of

 PCBs by  November  1, 1979, and at least annually thereafter.   If a machine

 showed a. concentration of over 50 ppm PCBs, it would have to  be drained and

 refilled  but there was no requirement that the machine be brought down to a":.
                                          !L/
 level  of  below  50 ppm, until July 1, 1984.     Here, RIPCO did the necessary '

 testing,  draining and refilling of its machines to bring the machines down to

 a  level of below 50 pptn almost two years before the July 1984 date.  In

 some cases this appears to have involved draining and refilling .the machine
             327                         '
 three  times.      It seems unlikely that this was less costly to RIDCO than

 if  the expenditures for testing,  draining  and refilling had been spread out

 over a longer period.   Moreover,  RIDCO did not confine its draining and

 refilling to the eight machines found  to contain over 50 ppm PCBs, but also

 drained and  refilled another machine in which the hydraulic fluid had tested
               33/
 at  48  ppm PCRs.     As to the savings  in taxes,  it  would seem that balanced

 against these,  whatever they may  be,  should  be the  production costs which

 RIDCO incurred  as a result  of the machines being out of service during the
                                                                _34/
 cleanup,  a sum  estimated  by  RIDCO's  officer  to be over $320,000.

     Aside from attempting  to discredit RIDCO's  cleanup costs, which I find

 unpersuasive, the EPA  has  ignored RIOCO's  argument  that  its  good faith efforts

 to  correct the  violation  and it's cooperation  with  the EPA and willingness to

 do more than  what minimally  may have been  required  of  it justify a  sub-

 stantial  reduction in  the  initially  determined penalty for both the marking
3\_f  40 C.F.R.  761.30(e).

22/  Tr. 96.

337  Respondent's  Exhibit  I,  Tr.  64-65.

34/  Tr. 68

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                                     15
 and unauthorized use violation.   Instead, the  EPA has implicitly taken the


 position that no reduction is warranted.  Nevertheless, RIDCO's argument

                                                     3S/
 has support in the guidelines and PCB Penalty  Policy. .  .  It also has merit.


 The proposed penalty, of. $35,000,  accordingly,  is rejected as not in


 accord with the guidelines and the PCB Penalty Policy, and excessive under


 the facts in tins case.


     As to how much the total penalty for these two violations should be


 reduced, the guidelines propose an adjustment of up to 15% for the attitude


 of the violator, i.e., its good faith efforts to comply with the regulations,


 the promptness of its corrective actions and any assistance provided the

                                            !§/
 EPA to minimize the harm to the environment.     That figure, hov;ever,  is a


 guide only and not an inflexible limit to cover all  cases.  In this case,


 I find that the promptness and thoroughness with which RIDCO acted to


 eliminate the hazards presented by its hydraulic systems merits 'a reduction


 of 25% in the proposed penalty.   I also find that  it would be in interest


 of justice to credit against  the penalty the $10,000 in  costs estimated to


 have been incurred in cleaning up the ninth machine, which contained
:35/  See 45 Fed.  Reg.  59773, 59775.


^67  45 Fed.  Reg.  59773.


37/  Tr. 67.

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                                    16

 less  than 50 ppm.  Taking these two factors into account, I find that an
                               38/
 appropriate penalty is $16,250.
                                        19/           . .
                                  ORDER        .-

      Pursuant to Section 16(a) of the Toxic Substances Control Act (15 U.S.C.

 2615(a), a civil penalty of $16,250 is hereby assessed against Respondent

 RIDCO Casting Co., Inc. for the violations of the Act found herein.      •  •

     Payment of the full  amount of the civil  penalty assessed shall be made

 within sixty (60) days of the service of the final  order upon Respondent by

 forwarding to the Regional  Hearing Clerk a cashier's; check or certified check

 payable to the United States of America.

                                        Gerald  Harwood
                                        Administrative  Law Judge
December 28, 1983
38/  The EPA argues that RIDCO  failed  to  post  the  large  PCB mark  after
receiving notice of the  violation.  Post-trial  brief at 9.  Presumably,  what
is referred to is that there  is no  evidence  that the machines  themselves
were marked between the  time  of the  inspection and the time the fluid
was brought down to a  concentration  of less  than 50 ppm.   In view of the
fact that RIDCO promptly directed its  efforts to removing  the  basic cause
of the violation, namely, the presence of  hydraulic fluid  with PCBs in
excess of 50 ppm, and also that in  doing the cleanup, the  PCBs were properly
stored and their containers properly marked  (Tr. 63, 136-37),  any violation
represented by the absence of the mark  in  the machines themselves  between  the
inspection and the time  the cleanup was finished was a technical  violation
at most, and does not adversely reflect on RIDCO's good faith  efforts to
comply.

39/  Unless an appeal is taken  pursuant to the rules of practice,  40 C.F.R.
22.30, or the Administrator elects to  renew the decision on his own motion,
the initial  decision shall become the  final order of the Administrator.
See 40 C.F.R.  22.27(c).

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27

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        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   BEFORE THE ADMINISTRATOR

IN THE MATTER OF:             )     Docket No. TSC-A VII-83-T-191
                              )
7 H Agriculture and Nutrition )
  Company,                    )
                              )
                   Respondent )
1.   Toxic SubstancesControl'Act - Disposal of Hazardous
    Waste - 4~cr Cf~R~,  FaTt7 7 5 ~  promu 1 gated pursuant To S~₯ction
    6 of  TSCA,  requires  persons who dispose of wastes containing
    TCDD  to notify the Administrator  sixty days before disposal.
    Respondent's  failure  to comply with said regulation is
    unlawful  under the express provision of Section 15 of TSCA,
    15 U.S.C.  2614,  and  subjected it  to a civil penalty pursuant
    to Section  16 of TSCA, 15  U.S.C.  2615.

2.   Toxic Substances Control  Act - Disposal of Hazardous Waste -
    Absent a  showing that  the  receiving facility, to which
    Respondent  twice transported waste containing TCDD, was a
    facility  "permitted  for disposal  of TCDD" under Section
    3005(c) of  the Resource Conservation and Recovery Act,
    Respondent  does  not  qualify for the "exclusion provided by
    40 CFR 775.197 and is  subject to  the prohibitions and
    requirements  provided  by  40- CFR Part 775.

3.   Administrative Law -  Regulations  - Regulations issued under
    a claimed  authority  and pursuant  to law carry a strong
    presumption  of validity;  any attack on Administrative
    Agency regulations must be made at the rule-making stage
    and has no  place in  an administrative hearing.

4.   Administrative Law -  Regulations  - Where the construction
    of Administrative  regulations is  at issue, deference to
    the Agency  interpretation  is clearly in order.  The inter-
    pretation  need not be  the  only interpretation but simply
    a reasonable  one.

5.   Admi n i st rat i ve Law -  U.S.  Constitution - Administrative
    Agencies  and  Administrative Law Judges cannot be expected
    to entertain  Constitutional  issues.

6.   Administrative Law -  Public Policy - In regulatory offenses
    thepublicinterest  outweighs the  individual  interest.
    Thus, for  sake of  adequate public  protection it is neces-
    sary  that  Respondent  conform to a  standard of conduct
    which will  insure  the  result intended by Congress.

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     Resource Conservation and  Recovery  Act  -  State  Authority
     Authority grantedto a state  to  issue permits under Tts
     hazardous waste program contemplates  that such  state
     program will be equivalent  to, consistent with  and no
     less stringent  than  the Federal  program;  42  U.S.C.
     Sections 6926,  6929.

     Administrative  Law - Toxic  Substances Control Act - Intent -
     Intent Ts not an e~leme^nt of the  offense charged and For
     which a civil penalty is assessed under Section 16(a) of
     TSCA.  Appearance of the subject rules and regulations in
     the Federal Register gave  Respondent  legal notice of their
     contents.
    Toxic Substances Control Act - Civil Penalty  -  Where a
    vTola tion is shown, a civi 1 penal ty shouId  b~e assessed
    after consideration of the factors set  forth  in Section
    16(a)(2)(B) of TSCA and the guidelines  issued for  the
    assessment of civil penalties relating  to  toxic substances
Appearances

For Respondent:    Donald F. Martin, Esquire
                   Blackwell Sanders Matheny
                     Weary & Lombardi
                   Five Crown Center
                   2480 Pershing Road
                   Kansas City, Missouri  64108

For Complainant:   Henry F. Rompage, Esquire
                   Office of Regional Counsel
                   U.S. Environmental Protection Agency
                   Region VII
                   324 East llth Street
                   Kansas City, Missouri  64106
                       INITIAL DECISION
                       Marvin £T.  Jones
                   Administrative Law Judge

    By Complaint filed August 12, 1983, Respondent, T H

Agriculture and Nutrition Company, Kansas City, Kansas (here'

inafter "Respondent"), is charged with two violations of  the

regulation 40 CFR 775.'190(b).  Said Complaint alleges, in

Counts I and II, respectively:
                             -2-

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1 .  That Respondent, on September 11, 1981, shipped for dis-

posal Ttr" least 20 cubic yards of waste material contaminated

with tetrachlorodibenzo-p-dioxin" (hereinafter  "TCDD") "from

the the manufacture of 2, 4,5-TCP or its pesticide derivatives"
*
without giving a 60-day notice to United States Environmental

Protection Agency (hereinafter "EPA", "Complainant" or the

"Agency") of said intended disposal, as by said regulation

required; and

2.   That Respondent, on September 25, 1981, shipped for

disposal "at least 20 cubic yards of waste material

contaminated with TCDD from the manufacture of  2,4,5-TCP or

its pesticide derivatives".without giving a 60-day notice to

Complainant  of said intended disposal,  as by said regulation

requ i red .

    On  each  count, Complainant proposes the assessment of a

civil penalty in the amount of $25,000  because of Respondent's

alleged failure to notify EPA of  said intended disposal 60

days prior the reto.

    Said regulation, 40 CFR 775.190(b), provides, in pertinent

part, as follows:

              (b)   Disposal notification.  Any person
              who disposes of chemical  substances or
              mixtures for commercial  purposes who wishes
              to dispose of wastes contai ni ng TCDD shall
              notify the Assistant Admi ni strator Fixty
              (60) days prior to  their  intended disposal
              of such wastes.   (Emphasis supplied.)

In  pertinent part, 40 CFR 775.180 states:

              ...  In addition, this  subpart requires
              persons who dispose of wastes containing
              TCDD to notify the  Administrator sixty
              days before disposal.

                             -3-

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Said regulations  were  promulgated  pursuant  to Section 6,

Toxic Substances  Control  Act  (hereinafter  "TSCA").,  15 USC

2605, which provides  as  follows:

             -Regulation  of  hazardous  chemical  substances
              andmixtures

              (a) Scope  of  regulation.  -  If the Administrator
              finds  that  the re -is  a  reasonable  basis to con-
              clude  that  the  manufacture,  processing, dis-
              tribution  in  commerce,  use,  or disposal of a
              chemical  substance or  mixture, or that any
              combination of  such  activities, presents or
              will  present  an unreasonable  risk of  injury to
              health  or  the  environment,  the Administrator
              shall  by  rule  apply  one  or  more of the following
              requirements  to such  substance or mixture to the
              extent  necessary to  protect  adequately against
              such  risk  using the  least  burdensome  requirements

                    (1)   A  requirement  (A)  prohibiting
                    the  manufacturing,  processing,  or dis-
                    tribution in commerce  of such substance
                    or  mixture,  or  (B)  limiting the amount
                    of  such  substance  or  mixture which may
                    be  manufactured,  processed, or  distri-
                    buted in  commerce.
                                  *   *   *
                    (6)(A)   A requirement  prohibiting or
                    otherwise regulating  any manner or
                    method  of disposal  of  such  substance
                    or  mixture,  or  of  any  article containing
                    such  substance  or  mixture,  by its manu-
                    facturer  or  processor  or by any other
                    person  who uses,  or  disposes of, it for
                    commercial purposes.

    At  a  prehearing  conference held  in  Room 101, 324 East

llth Street,  Kansas  City, Missouri,  on  October  18,  1983,

beginning at  9:30 a.m.,  and  at the  adjudicatory hearing held

in Room 415B,  at  the  aforesaid address,  on  October  27» 1983,

at 9:30 a.m.,  Respondent  admits  that  no  notice  was  given '

respecting said  shipments (TR. 3)  and  that  said shipments
                             -4-

-------
or combinations of such hazardous waste and other solid waste,

proposed to be disposed of, treated, transported, or stored,

and the time, frequency or rate of such handling as well as

the site thereof.

    Respondent contends in its Answer, dated August 30, 1983,

and its letter, dated Septe.mber 6, 1983, that, by virtue of

the Interim Status of Texas Ecologists, Inc., pursuant to 42

U.S.C. 6925 (-e), and the State Hazardous Waste Program of Texas,

authorized by EPA (pursuant to 42 U.S.C 6926), and "the

decisions and permits made and issued by the State of Texas

under said program, making the subject facility authorized

and permitted to receive and dispose of the materials shipped",

that  the aforesaid shipments were excluded from the 60-day

notification requirements. _!_/ It is further there contended

that  EPA's position that the 60-day notification is required

by the regulations despite the "Interim Status" and authorized

state program and the permits and authority granted Texas

Ecologists, Inc.,  denies Respondent due process (under the

14th  Amendment of the U.S. Constitution) because said

requirements and regulations are indefinite, vague and

ambiguous "in not conveying the proscribed conduct when

measured by common understanding and practices" (page 2,

Respondent's letter,  dated September 6, 1983).
I/  Respondent apparentl.y refers to 40 CFR 775.197 set out hereinabove
    In this regard,  42 U.S.C. 6929 modifies 42 U.S.C. Section 6926(d).
    While the latter section provides that state action under a
    hazardous waste  program shall have the same force as action by _
    the Agency,  Section 6929 provides that a state may not impose
    provisions 1 ess  stringent than provided by the Act.
                             -6-

-------
were made (Respondent's letter, dated September 6, 1983),

to Texas Ecologists, Inc.. waste disposal facility., in Robs town.,

Texas, and that the carrier used to transport said hazardous

waste was Materials Recovery Enterprises, Incorporated (TR.
i
23).  However, Respondent  denies that a violation occurred,

relying on 40 CFR 775.197(a), to wit:

              Exclusions.

              (a)  This subpart does not apply to persons
              disposing of wastes containing TCDD at f a c 2_]j_t_i e_s_
              permitted for	disposal of TCDD under section
              3005(c")oTThe Resource Conservation and Recovery
              Act, 42 U.S.C. 6925(c).  (Emphasis supplied.)

    Said section 3005(c),  42 U.S.C. §6925(c), provides, in

pertinent part:

              (c) Permit issuance •

              Upon a determination  by the Administrator
              (or a State, if applicable),  of compliance
              by a facility for which a permit is applied
              for under this section with the requirements
              of this section and section 6924 of this
              title, the Administrator (or  the State) shall
              issue a permit for such facilities. . .

    Section  6924 sets down standards applicable to owners and

operators of  such facilities, including (subsection 7)

compliance with  the requirements of said Section 6925.

Section 6925,  Subsection (b)'-  Requirements  of Permit

application  -  provides  that applications for a permit "shall

contain such  information as may be  required  under regulations

promulgated",  including the composition,  quantities and

concentrations of any hazardous waste identified or listed,
                             -5-

-------
    Further, Respondent does not admit that it comes within

the definition (40 CFR 775.183[c]) of "disposes of. ..[chemical

substances or mixtures] for commercial purposes."  There is
                                                «
no question that "persons who use chemicals in their commercial
i
enterprise also are considered to dispose of their waste

chemicals for commercial  purposes."   In the Preamble to 40

CFR Part 775, contained in 45 FR at page 15598 (March 11,

1980), it is stated:

              For example, while a manufacturer of the
              pesticide 2,4,5-T may be subject to the
              jurisdiction of FIFRA with regard to the
              registration of the pesticide, he is subject
              to TSCA jurisdiction for regulation of the
              TCDD waste  disposal incidental to that pro-
              duction.  EPA considers any waste disposal
              (or actions incidental  thereto) by Vertac,
              for example, to be disposal for commercial
              purposes because Vertac is engaged in the
              commercial  manufacture  -of pesticides."

    The remaining contentions of Respondent were also addressed

in said Preamble, supra ,  page -15598,  column 2, where it

states, in summary:

              Persons shall  not >e allowed  to dispose
              of TCDD wastes in facilities  covered only
              by intermin status under section 3005(e)
              of RCRA without prior notification.

Discussion and Conclusions

    On consideration  of the entire record and the briefs submitted

by the parties,  I find that a civil  penalty should be assessed.

All proposed findings inconsistent herewith are rejected.

    Under-the pertinent.regu1 ations  cited hereinabove, Respondent

clearly violated 40 CFR 775.190(b) in failing, on September 11,

1981,  and again  on September 25, 1981, to give the 60-day


                             -7-

-------
 notice to EPA of  its  intended  disposal  of  TCDD as  by said


 regulation required.   I  further  find  that  Respondent does not


 come within the exclusion  provided, in Section  775.197(a) of
                                   /

 40 CFR for the reason that.the facility to which Respondent's
 i

 TCDD waste was shipped was  not,  on this record (TR.  5),


 "permitted for disposal  of ''T C D D. "   In so finding,  I  have


 given "weight and  considerable respect" to the Preamble to 40


 CFR Part  775 (45  FR,  page  15598.  March  11. 1980),  supra.


 (see Withers v.  USPS.  417  FS  1 [1976];  Black  Hills  Video


 Corporation v. FCC,  399  F.2d  65  [1968]).   Regulations  issued


 under a  claimed  authority  and  pursuant  to  law  carry  a  strong


 presumption of validity  (Edwards  v . Owe n s , 137 FS  63 [1956];


 Foremost-McKesson.  Inc.  v.  Davis.  488 SW  2d  193 [MO]).


^Further,  it is well  settled  that  the  statutory interpretation


 of an agency which  is  charged  with the  administration  of a


 particular act will  not  be  overturned,  unless  it is  patently


 unreasonable.   When,  as  here,  the  construction of  an


 administrative regulation  (rather  than  a  statute)  is an issue,


 deference  to the  Agency  interpretation  is  even more  clearly


 in order.   The interpretation  need not  be  the  only  interpretation


 but simply a reasonable  one  (see  Train  v.  NRDC,  421  U.S. 60,


-I.e. 87  [1975]; Udall  v. Tallman.  380 U.S. 1,  16-18  [1965];


 McLaren  v. Fleischer,  256  U.S. 477, 480 [1921]).


     Respondent's  claim of  "denial  of  due  process"  and  its


 attack on  the  regulation are both  misplaced.   I  am precluded
                              -8-

-------
from passing on the constitutionality of procedures which I



am called upon to administer, Frost v. Weinberger  (NY 1974)



375 FS 1312, 1313(11), 515 F2d 57; see also City of Joplin v.



Industrial  Commission of HO (MO 1960), 329 SW 2d 687.  In



Public Utilities Commission v. U.S., 355 U.S. 534, I.e. 539,



78 S.Ct.  446, I.e. 453, the Supreme Court observed (with



reference to an administrat-ive proceeding):  "The  issue is a



Constitutional one that the Commission can hardly  be expected



to entertain", confirming F PC v.  Texaco , 377 U.S.  33 (1964).



In Storer Broadcasting Co. v. U.S., 351 U.S. 192,  I.e. 205,



76 S.Ct.  763, I.e. 771 (1950), the Court held that an attack



on the Rules and Regulations of an Administrative  Agency must



be made in  the "rule making proceeding" and has no place in



an administrative hearing.  See further Weinberger v. Salfi,



422 U.S.  749, I.e. 765 (1975).



    The underlying logic for such holdings is apparent.



Using the language of Bel si nger v. D.C. (DCDC 1969),  295 FS



159,  436  F.  2d 214, "the offense  is not a criminal offense



but a regulatory one.  In regulatory offenses the  public



interest  outweighs the individual  interest."  Thus, for sake



of adequate  public protection, it  is necessary to  hold Respondent



to that standard of conduct which will insure the  result



intended  by  Congress.  On this record, TCDD is not now and



was not,  in  September, 1981, a "listed waste" under the



Resource-Conservation and Recovery Act (RCRA) (TR. 6).
                            . .-9-

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Further, it was "not possible for a landfill to be fully


permitted for disposal of TCDD" under RCRA Section 3005(c)


in September, 1981 (TR. 5).  On this record, the Part A


Application of Texas Ecologists (to whom said shipments by
i •                                  •

Respondents were made) did not list TCDD as a hazardous waste

                           s/
which it would receive (T R .'. 4 4 ) ,  though said Part A Application


did, in fact, list over 400 RCRA  "listed wastes" (Respondent


["R"] Exhibit ["Ex."] 1.   Respondent's only witness, Willis H.


Hart (TR. 22), Thcinpson-Hayward Chemical Company Vice


President for Engineering and Environment, who has the


responsibility to see that Respondent  is in compliance with


regulations concerning the environment (TR. 47), testified


that he found that the receiving  landfill, Texas Ecolocists,


.at Robstown,  Texas, had an EPA identification number which


signified,  to him, that "they had filed a notification with


(EPA) and had submitted a Part A  application, as a minimum"


(TR. 24).  He made a telephone call  to them and confirmed


"they were  a  hazardous waste  disposal  facility, the types of


materials in  general  they could take"  and that they had a


state permit  (TR.  25).  Mr. Hart  was familiar with the


regulations in 40 CFR Part 775 (TR.  26), and with the


requirements  of Sections  3005 and 3010 of the Act (TR. 31).


He did  not  determine that TCDD was  listed on the Part A


Application of Texas Ecologists (TR. 44); he did not contact


EPA  or  any  Texas  state agency to  determine if the state agency


had  authority under RCRA  to permit  landfills to take TCDD


(TR. 46);  nor did he determine if  Texas Ecologists had been,


                             -10-

-------
in fact, "permitted for disposal  of TCDD". (TR. 46).  Mr.

Hart did determine, however,  in contacting the Texas state

agency administering the state's  waste disposal program,

that the 1972 permit issued to said Texas Ecologists (R Ex. 7)

was still in force and effect (TR. 64).  Since he was familiar

with the provisions of 40 CfR Part 775, and made contact with

the state agency and said receiving facility, the question

remains why he did not inquire specifically whether said

Texas Ecologist  was a  facility "permitted for disposal  of

TCDD".  This inquiry could easily have been made to the EPA

Regional Office  in Kansas City,  Missouri, hut was not.   Such

inquiry likely would have revealed that no landfills were

anywhere "permitted for disposal  of TCDD" (TR. 5).

    Contrary to  Respondent's  argument, the violations with

which Respondent is charged were  explicitly proscribed  by the

language of Sections 775.190(b)  and 775.180 of 40 CFR,  and
                                 i
Respondent  does  not come within  the exclusion provision of 40

CFR 775.197(a).   Respondent's failure to make the essential

factual determination  that the subject receiving facility was

not a facility "permitted to  receive TCDD" was not  due  to its

being unaware of "a requirement  prohibiting...(said) disposal";

but rather  to its  indifference to, or a reluctance  to recognize,

the literal  wording of the rules  and regulations governing said

shipments.   This is not to say that it is a defense to  the

charge if Respondent claims it did not know of the  prohibition
                             -11-

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contained in the rule cited hereinabove.   Publication of the

rules in the Federal  Register imparted notice to Respondent
                                      •»         \
of said provisions  and, legally,  is  the" notice to which it

was entitled.  2/
c
Civil Penalty                        ,                  '
                          5
    The statutory  criteria for assessing  penalties under

TSCA, Section  16(a),  are listed in  Section  16(a)(2)(B),  15

U.S.C.  2615(a)(2)(B) , which  provides as  follows:

              In determining the  amount  of  a  civil penalty,
              the  Administrator shall  take  into account  the
              nature, circumstances, extent,  and gravity of
              the  violation  or violations  and, with respect
              to the  violator, ability to  pay, effect on
              ability to continue to do  business,  any history
              of prior such  violations,  the  degree of culpa-
              bility, and  such other matters  as justice  may
              require.

    To  provide  guidance to the assessment  of  penalties  under

Section 16,  the  EPA enforcement staff  has  issued guidelines

setting forth  the  general  policies  it  will  follow  and has  sup-

plemented these  guidelines with a specific  policy  for assess-

ing penalties  for  violations  relating  to polych1 orinated biphenols

("PCBs")  and other  toxic substances.  3/
2/   See  In  the  Matter  of  Ridco  Casti ng Co.,  Docket  No.  TSCA-
    82-1089 (1983),  citing~F edera1  Crop  Insurance  Corp.  v.  Merrill.
    332  U.S.  380,  384-85  (1947),  where the  Supreme  Court
    stated,  "[J]ust  as  everyone is  charged  with  knowledge of
    the  United  States  Statutes  at Large, Congress  has  provided
    that  the  appearance  of  rules  and  regulations  in  the federal
    Regi ster  gives  legal,  notice of  their contents."


3/   See  45  Federal  Register  59770-59783  (September  10,  1980),
    referred  to  herein  as the PCB penalty policy.


                             -12-

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The procedural rules for these proceedings  require that  I

consider the guidelines and PCB penalty policy  in determining

the appropriate penalty, and that if I assess a penalty

different in amount from that proposed in the Complaint,  I
i
must give my reasons therefore. £/

    The PCB penalty policy fcses a matrix to establish an

initial penalty based upon the nature, extent,  circumstances

and gravity of the violation. .The initial  penalty can then

be adjusted upwards or downwards depending  upon consideration

of the other statutory factors, i.e., culpability, history of

such violations,  ability to pay, ability to continue in

business and such other matters as justice  may  require. ^/

    The regulation here twice violated is a "chemical control"

regulation which  places constraints on how  TCDD is handled in

an effort to minimize the risk presented by this very toxic

substance. ^/  I  have concluded that said transportation and

handling on both  of the occasions here considered presented a

"significant chance" to cause damage to public  health and

the environment,  i.e., the likelihood of damage was lessened

by the use of an  experienced means of transport.  It is the

"probability of harm" or potential for harm and the risk

inherent in the violation as it was committed that is properly

considered rather than any actual harm that resulted from
              •
subject violation. 7/
V  40 CFR  22.27(b).

$/  45 Federal  Register 59777 (September 10, 1980).

6/  Ibid.  59771.

]_/  Ibid.  59772.
                             -13-

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    The circumstances  (probability  of  damages),  indicated on

this record,  are at "mid-range  level  3"  on  the horizontal axis
                         \
of the matrix (45 FR  at  59771).   The  "extent  of  potential damage"

on the vertical  axis  of  the..matrix  is  "major."

    in the premises,  upon consideration  of  the statute and
                           t
the guidelines for the assessment  of  penalties relating to

toxic substances, and  all of  the  factors  herein  set forth, I

find that  a civil penalty of  5-15,000  should be assessed for

each of said  violations  by  Respondent,  for  a  total  penalty of

$30,000.

    I do  not  find that any  adjustment  is  warranted  because of

Respondent's  "ability  to pay."   No  claim  of inability to pay

is made on this  record nor  it  is  claimed  or shown  whether

Respondent's  ability  to  continue  in business  will  be affected

by assessment of the  penalties  proposed.  Further,  there is

no evidence in this record  that  Respondent's  history of com-

pliance is unfavorable.

    It should be pointed out  that  i ntent  to violate is not a

factor to  be  considered; J5/   however,  "culpability" of the

violator  should  be and has  been  considered  in determining if

an adjustment to the  penalty  amount is warranted.   No adjust-

ment to the penalty- for  this  cause  is  appropriate.
8/  Cf.  15  U.S.C.  2615(a)  with  2615(b).  (See  16[a]  and [b].)
    The  words  "knowingly  or willingly" which  appear in
    Section  16(b)  do  not  appear  in  Section  16(a).   Thus,
    while  intent  is  an  element  of the offense  for which a
    criminal  penalty  may  be assessed, it  is  not  an  element
    of  offenses  for  which  civil  penalties  are  assessed.

                             -14-

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                           ORDER £/

    Pursuant to Section 16(a)  of the  Toxic  Substances .Control

Act (15 U.S.C. 2615[a]), a civil penalty of  $30.000  is  hereby

assessed against "Respondent T  H Agriculture  and  Nutrition

Company for the violations of  the Act found  herein.   •  •

    Payment of the full amo'unt of the civil  penalty  shall  he

made within 60 days of the Service of the Final  Order upon

Respondent by forwarding to the Regional Hearing Clerk,  U.S.

EPA, Region Vll, a cashier's check or certified  check payable

to the Treasurer, United States of America.



DATED:  January 10, 1934  .            //'/i,\
                                  Marvin E . Jones
                                  Administrative Law Judge
2/  Unless an Appeal is taken pursuant to the Rules of Practice,
    40 CFR 22.30, or the Administrator elects to review the Decision
    on his own Motion, this Initial Decision shall become the
    Final  Order of the Administrator  (40 CFR 22.27[c]).
                             -15-

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                     CERTIFICATION  OF  SERVICE
     I  hereby  certify  that,  in  accordance  with  40  CFR  22.27(a),
                                                        i


I  have  this  date  forwarded  to the  Regional  Hearing Clerk of Region
t


VII,  U.S.  Environmental  Protection  Agency,  the  Original  of the



above and  foregoing  Initial ''Decision  of Marvin  E.  Jones,



Administrative Law Judge,  and have  referred  said Hearing Clerk to



said  section which further  provides  that,  after  preparing and



forwarding a copy of  said  Initial  Decision  to  all  parties, she



shall forward  the Original,  along  with the  record  of  the proceeding,



to the  Hearing Clerk,  who  shall  forward a  copy  of  said Initial



Decision  to  the Administrator.
DATED:   January  10,  1984
                                  Mary  Lou  Clifton

                                  Secretary  to  Marvin  E.  Jones,  ADLJ

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*
      UNITED STATES ENV!3G\'V,ENTAL PROTECT, CN  i.C-^'-.CV
                           =IEGON  v;i
                     2T4 EAST  ELEVENTH.  STREET
                    K.A?;=AS CITY. '.'.:sso'jRi - 6'^D6
IN THE MATTER OF

T H Agriculture and Nutrition
    Company
                Respondent
                                     Docket No.


                                     CERflFICATION OF SERVICE
                                                  TSCA VII-
                                                   83-T-19L
      In accordance  with  Section  22.27(a) of the Consolidated
Rules of Practice Governing  the  Administrative Assessment of
Civil Penalties  ...   (45 Fed.  Reg.,  24360-24373, April 9,
1980), I hereby  certify  that  the original of the foregoing
Initial Decision issued  by Honorable Marvin E. Jones, along
with  the entire  record of  this proceeding was served on the
Hearing Clerk (A-110) , Environmental Protection Agency,
401 M Street, S.W., '.'ashing ton,  D.C. 20460 by certified .-nail,
return receipt requested;  that a copy was hand-delivered .to
Counsel for Complainant,  Henry F.  Ro:npage,  Office of Regional
Counsel, Environmental Protection  Agency, Region 7,  324 E.
llth Street, Kansas City, Missouri;  that a copy was  served by
certified mail,  return receipt requested on Respondent's attorney
Donald F.  Martin, Blackwell, Sanders,  Matheny, Weary & Lorabardi;
Five Crown Center,  2480  Pershing Road,  Kansas City,  MO 64108.

     If no appeals are made (within  20  days after service of
this Decision), and the  Administrator does  not elect to review
it, then 45 days after receipt this  will beco;oe the  Final
Decision of the Agency (45 F.R.  Section 22.27(c), and Section
22.30).
1984.
     Dated in Kansas City, Missouri  this  10th day of January
                                      ita  Ricks
                                    Regional  Hearing Clerk
cc:  Honorable Marvin E. Jones
     Administrative Law Judge

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28

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         BEFORE THE ADMINISTRATOR
 In the Hatter of          •  *        )
                                    )
     General Electric, Aircraft •-   )
       Engine Group,                )  Docket No. TSCA-V-C-147
                                    )
                       Respondent   )
1.   Toxic Substances Control  Act - PCB - The 50 ppm regulatory cutoff
     in the PCB Ban Rule does  not apply to the cleanup of PCB spills.

2.   Toxic Substances Control  Act - PCB - A PCB spill  must be cleaned up
     to the 1ov,-?st level  below 50 ppm practicably attainable through the
     use of normal cleanup nethods.

3.   Toxic Substances Control  Act - PCB - Respondent assessed a penalty
     of $3,750, where the spill  had been cleaned up to a level  of  13 ppm
     PCBs, but the record showed that it could have been cleaned up to
     much lower levels by application of normal  cleanup methods.
Appearances:
                Lisa  S.  Seglin,  United  States  Environmental  Protection
                Agency,  Region  V,  Chicago,  Illinois,  for Complainant.

                Jeffrey  0.  Cerar,  Squire,  Sanders,  and  Dempsey,  1201
                Pennslyvania  Avenue,  N.W.,  Washington,  D.C.  for
                Respondent.

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                              INITIAL  DECISION


      This  is  a  proceeding  under  the Toxic  Substances  Control  Act  ("TSCA"),

 section 16(a),  15  U.S.C. 2615(a),  for the  assessment  of  civil  penalties for

 violation  of  a  rule  promulgated  under section 6(e) of the Act, 15 U.S.C.

 2605(e), establishing  prohibitions and requirements for  the manufacture, .

 processing, distribution in commerce,  use, diposal, storage and marking of
                                                               I/
 polychlorinated biphenyls  ("PCB  Ban Rule"), 40 C.F.R. Part 761.    The

 complaint  issued by  the Director, Waste Management Division,  Region V,

 United  States Environmental Protection Agency ("EPA"), charged Respondent

 General Electric Aircraft  Engine Group  ("General Electric") with violation

 of the  PCB Ban Rule  by storing a 55-gallon drum containing PCB contaminated

 material and  five  5-gallon cans  of PCB liquids in a storage area not complying

 with the requirements of the PCB Ban  Rule, by  failing to mark the storage

 area as required by  the Rule, by not maintaining records required by the

 Rule with respect to the drum and containers,  and with not properly dis-

 posing of PCBs that were released after a high pressure airline ruptured.

 A total penalty of $20,000 was requested, $1,500 for  the storage violation,

 $500 for the marking violation, $1,000 for the recordkeeping violation and

 $17,000 for the disposal  violation.
]_/  Section 16(a) provides in pertinent part as follows:   "(1) Any person
who violates a provision of section 15 shall be liable to the United
States for a civil penalty in an amount not to exceed $25,000 for each
such violation.  Each day such violation continues shall, for the purposes
of this subsection, constitute a separate violation of section 15."

    TSCA,  section 15, makes it unlawful  among other acts, for any person  to
"(1) fail  or refuse to comply with .  . . (c) any rule promulgated . .  .
under section . . . 6."

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                                    2

      General Electric filed an ans-.ver to the complaint.  The issues as to

 the  storage, marking, and recordkeeping violations, hov:ever, v;ere really

 defined  by a stipulation between the parties, according to which the charge

 relating to the 5-gallon containers was dropped, the remaining violations •

 admitted, and as to the requested penalty for them, General Electric disputed

 only  the appropriateness of the penalty for the recordkeeping violation      . .
                             y
 involving the'SB-gallon drum.    With respect to the alleged improper disposal,

 General  Electric denied the violation,  asserting that by cleaning up the PCBs

 released by the rupture of the airline to a level of less than 50 ppm, it had

 complied with the PCB Ban Rule.  General  Electric also contended that the

 requested penalty for that violation was  excessive.

      A hearing  was held in Washington,  D.C. on  October 12,  1933.  Thereafter,

 each  party submitted proposed findings  of fact, conclusions of law and a

 proposed order  together with supporting briefs.   On consideration of the

 entire record and the submissions of the  parties, a penalty of $6,750

•is assessed.   The findings,  conclusions and reasons for this penalty follow.

 All proposed findings and conclusions  which are inconsistent with this

 decision are  rejected.

                             Findings  of  Fact

 1.    Respondent  General  Electric  is  a New York  Corporation  which at  all  times
                                                                 I/
 relevant to  this action  maintained  a facility in Cincinnati, Ohio.

 2.    On October  6,  1982, an  inspection  of the General  Electric  facility was
2J  See Transcript of Proceedings  ("Tr.")  4.

V  According to the  complaint,  Par.  1, which was not denied  by  General
Electric, the facility was  located  in Cincinnati, Ohio.   The  actual  location
appears to have  been  in Evendale, Ohio, a  suburb of  Cincinnati.   See
Respondent's  proposed finding  of fact No.  2.  In the transcript,  the
location is referred  to as  "Eatondale".  See e.g., Tr. 86.

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 conducted  by Ohio  Environmental  Protection Agency  employees as representatives

 of  the  EPA to determine compliance v.'ith the PCB Ban Rule.  Complainant's

 Exhibit 1; Tr. 9.

 3.    At the time of the inspection, General Electric maintained one 55-

 gallon  drum of PCB solids in a PCB storage area in Building 705 which was

 not  curbed as required by 40 C.F.R. 761.65(b).  Answer, Par.l; Tr. 4.~

 4.    At the time of the inspection, the PCB storage area in Building 705

 was  not marked as  required by 40 C.F.R. 761.40(e) (10).  Answer, Par. 4;

 Tr.  4.

 5.    At  the time of the inspection, the annual PCB document maintained by

 General  Electric for the facility did not  show the date the SB-gallon

 drum  of  PCB solids was removed from service,  the date it was placed in

 storage for disposal,  and the total weight in  kilograms of PCBs as re-

 quired  by 40 C.F.R. 761.180(a).   Answer, Par.  5; Tr.  4.

 6.    At the time of the inspection, the EPA inspectors observed an oily

 residue on an interior wall  and  adjoining  ceiling in  Building  302, in an

 area used as  a  machine shop.   The residue  was  heavier at the top  of the

 wall and on the ceiling,  and  lighter at the bottom of the wall, indicating

 that the oil  had run  down  the wall.  Tr. 12,  103;  Complainant's Exhibit 1.

 7.   The inspectors took  two  swab samples  from the  wall, one from the

 sixth or ninth  cinderblock up from the  floor,  and  one  from the  fourteenth

 cinderblock.   The samples  were taken  by wiping a cotton swab dipped in

hexane,  a solvent,  over a  100 square  centimeter (100  cm^)  area  marked  out
                                                    .!/
with a template.   Tr.  13-15;  Complainant's Exhibit  1.
47  While Ms.  Sword testified  that  she  took  a  swab  sample  from  the  ninth
cinderblock  up  from the  floor  (Tr.  14),  the  inspection  report states  that
the sample was  taken six blocks  from the floor (Complainant's Exhibit 1).
It is  immaterial  whether it  was  the  sixth  or the  ninth  block.

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                                    4

 8.    Sample ER 335, taken 14 blocks up frt>n the floor, on analysis, disclosed

 a  PCB concentration of 2.2 micrograms/cm2 (220 ug/100 cm2), and sample ER 336

 taken from the block closer to the floor disclosed a PCB concentration of

 0.31  micrograrns/cm2. (31 ug/100 cm2).  Complainant's Exhibit 1; Tr. 45  '   '.

 9.    Duplicate samples were taken by the inspectors from 100 cm2 areas

 adjacent to the EPA's sample areas, and given to General  Electric.  These

 were  tested for General Electric by Kettering Laboratories and were reported

 to contain 13 and 2.5 parts per million (ppm) PCRs respectively in a 10 ml
                                                                   I/
 hexane solution.  Tr.  14; General  Electric proposed finding No. 38.

 10.   The oily residue on the wall  and ceiling resulted from the rupture of

 a compressor airline in Building 302 on February 17, 1982.   The history of

 this  incident and General Electric's actions with respect to it are as

 follows:

      A.  The airline rupture spread asbestos insulation on the outside of

 the line throughout the area and also sprayed the wall  and ceiling in the

 vicinity of the ruptured pipe with about  two to three quarts of oil that

 had accumulated inside the pipe.  Tr.  88,  103;  Complainant's Exhibit 5;

 Respondent's Exhibit 3.
_5/  General Electric as support  for  the  results  of  the Kettering tests cites
a document not introduced into evidence  but  furnished  in  its  prehearing
exchange as "Respondent's Document 2."   A document  not introduced into
evidence does not consitute  evidence and  cannot  be  relied on  to  support a
finding, unless it is a document that can be officially noticed, which cannot
be said of Document 2.   The  EPA, however,  has not questioned  General  Electric's
proposed finding that PCBs were  present  on the wall  in the concentrations
stated, but instead has taken the position that  even if PCBs  were present in
such concentrations, it would still  be a  violation  of  the disposal  requirements.
See infra at 14, n.25.   Accordingly, General  Electric's proposed finding is
accepted as reliably stating the results  of  the  Kettering test.

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      B.   Gsrieral Electric  immediately  began  to clean  up  the  debris  from  the



 spill.   At that point it was unaware that the spattered  oil  contained  PCBs



 and  directed  its efforts to  removing the asbestos.  The  cleanup  included



 twice wiping  down the wall on which the oil  had sprayed'with 1,1",1  - -  "



 trichloroethane, a solvent that dissolves oil.  Tr. 90,  114, 140, 142.



     C.   Samples of the oil on the wall were taken immediately, after the  :  .."...



 airline  rupture and before cleanup for possible future use in investigating



 the  incident.  Tr. 91, 94.



     D.   During its investigation of the incident in the three weeks following



 the  airline rupture, General  Electric discovered that PCBs had been used in



 the  compressor between 1953 and 1971.  It then took a portion of the'oil



 samples it had taken before cleanup and submitted them to DuBois Testing



 Service and Kettering Laboratory for testing.  Tr. 91.



     E.  The results of the tests were reported  on March 22,  1982.   The sample



 analyzed by Kettering Laboratory disclosed 84,460 ppm PCBs.  The sample



 analyzed by DuBois Testing Service disclosed 60,000 ppm PCBs.  Tr.  117;



 Respondent's Exhibits 1  and 2.



     F.  When the  test  reports  were received confirming the presence of PCBs



 in the oil,  General  Electric  had already  disposed  of  the debris  and  cleanup



materials in an asbestos  landfill, which  was not  approved for the disposal



of PCBs.   Tr.  116-17.



     G.   On  March  23 or March 24,  1982, General  Electric informed Tom Winston,



 Chief of  the Southwest  District  Ohio  Office  of the State EPA  about the  disposal



of the PCB contaminated material.   Mr.  Winston recommended that  General Electric



call  the  Chief of  the Waste Management  Branch, EPA, Region V.  Tr. 100, 123,  130.



     H.   On  March  25,  General Electric  called EPA, Region V,  and  was referred  to



Mr.  David Homer.   The substance  of the  conversation with  Mr.  Homer dealt  with

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                                    6



 G.r.sral Hl'Vctric having disposed of the debris end ."Stc-rials fro:n the



 cleanup in t'.'.e .isbos'ccs landfill.  Kr. Ko:.;or -,.'as ^pparently told th-at



 "the discolored areas v;ere wiped clean."  In fact, however, there was



 still an oily residue visible on the wall.  Respondent's Exhibit 3;



 Complainant's Exhibit 5; Tr. 12, 19.      '  .   " =



     I.  Mr. Homer,.on being told by General Electric that the amount of



 oil discharged by the rupture was 2-3 quarts,  and  contained 7% PCBs



 (equivalent to 70,000 ppm), said that the overall  concentration in the 	 " ,



 debris and.cleanup materials was around 20 ppm,  and that the EPA would take no



 action with respect to the disposal  of the debris  and cleanup material.  He



 stated, however, that if General Electric found  anymore oil that the contractor.



 had missed, this should be cleaned up and the  materials involved be sent to an



 Annex II landfill.   Tr.  130-131; Complainant's Exhibit  5;  Respondent's Exhibit 3.



     J.  No further cleanup of the wall was  done and the oil  stains seen by the



 EPA inspectors on the wall  were  what remained  from the  spill  after General



 Electric had finished it's asbestos  cleanup.  Tr.  114-15.



 12.  Subsequent  to the issuance  of the complaint in this case,  General Electric



 was advised by the EPA at  a settlement conference  to undertake  a further clean-



 up of the  PCBs on the wall.   Tr. 92, 100-01, 113-15, 117-18.



 13.  This  second cleanup was done in August  1983.   It required  first stripping



the paint  from the  wall, which had been painted  in  early 1983,  after the EPA's



 inspection, as part of a regular maintenance program.  The area was then cleaned



with Spic  and  Span  and Freon,  a  solvent.   Tr.  82,  92, 143.



14.  After this  second cleanup,  samples were taken  of the  affected  area which



revealed levels  of  less  than  one ppm PCBs.   Tr.  144;  Respondent's  Exhibit 4.



                        Discussion and Conclusions



     The only  contested  violation  is the  charge of  improperly disposing of



PCBs discharged  by  the ruptured  airline,  specifically with  not  complying with

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                                     7


 40 C.F.R.  section  761.60(d).   The  relevant provisions are  761.60(d)(l) and  (2),

 which  read  as  follows:           ..

                     (d)  SPILLS.  (1) .Spills, leaks,.and other
                     uncontrolled discharges of.PCBs constitute	
                     the  disposal of  PCBS.    "  '
                     (2)  PCBs resulting from the clean-up and
                     removal of spills, leaks, or other uncon-
                     trolled discharges, must be stored and
                     disposed of  in accordance with paragraph "...
                     (a)  of this section. 6J

     The above provisions have been  in effect since September 24, 1982.

 Prior  thereto the section read-in pertinent part as follows:

                     (d)  SPILLS.  (1) Spills and other uncontrolled
                     discharges of PCBs constitute the disposal  of
                     PCRs.
                     (2)  PCEs resulting from spill cleanup and removal
                     operations shall  he stored and disposed of  in
                     accordance with  paragraph (a) of this section.
                     In order to determine if a spill  of PCBs has re-
                     sulted in a contamination level that is 50 ppm
                     of PCBs or greater in soil, gravel,  sludge, fill,
                     rubble, or other land based substances, the
                     person who spills PCBs should consult with
                     the appropriate EPA Regional  Administrator
                    to obtain information on sampling methods
                     and analytical  procedures for determining
                    the PCB contamination level  associated with
                    the spill.  TJ


     For reasons hereafter explained both the prior and  present versions

of section 761.60(d), are relevant  to the determination  of General  Electric's

1iability.
6/  47 Fed. Reg. 37342, 37359 (August 25,  1982).   A third paragraph,  761.60(d)
J3), which provides that the disposal  regulations  do not  exempt  persons  from
any actions or liability under other statutes,  is  not claimed  to be  relevant
to this proceeding.

TJ  40 C.F.R. 761.60(d) (1982).

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      Initially to  be decided is what constitutes an improper disposal under

 the  rule.   General Electric argues that a spill  is not per se  an improper  .
                                                           —8/
 disposal but becomes"such if it is not adequately cleaned up.    While it

 is  not  at  all clear that"this is also the position of the EPA, it is clear  -:

 that  this  case would not have been brought if in the opinion of the EPA the
                                     I/
 spill had  been adequately cleaned up.  rhe question, then, is whether the •••--•

 cleanup of the spill on the wall was "adequate".  General Electric says that

 it was because a spill  need only be cleaned up to where the residue left

 contains less than 50 ppm PCBs.  The EPA disagrees and asserts that the

 cleanup must be carried to the lowest level  below 50 ppm which is practicably

 achieveable through the use of normal cleaning procedures, and that was not

 done  here.

      In support of its argument, General  Electric relies on the following

 statement  in section 761.1  of the PCB Ban Rule:

                    * * * Unless it is otherwise specificlly
                    provided, the terms  PCB  and  PCBs are used
                    in this rule to refer to any chemical
                    substances  and combinations  of substan'ces
                    that contain 50 ppm  (on  a dry weight basis)
                    or  greater  of PCBs, as defined in  § 761.3(s),
                    including any byproduct, intermediate, or
                    impurity manufactured at any point in a
                    process.  Any chemical  substances  and com-
                    binations of substances  that contain less
                    than 50 ppm PCBs  because of  any dilution,
                    shall  be included as  PCB and PCBs  unless
                    otherwise specifically  provided.  * * *
BJ  Respondent's brief at 14.   Reference  in this opinion  to  the  "cleaning
up" of a spill  means  removing  the  spilled PCBs or material contaminated
with PCBs from the spill  site  and  disposing of them  in  an acceptable way.

9/  Tr. 66-67,  70-71;  Complainant's brief at 20,.

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                                     9

      In this case, the evidence discloses that the oil  sprayed on the v.'all

 contained several  thousand ppm PCBs.   General  Electric  accordingly does

 not question its obligation under the rule to  clean up  the sprayed oil.  It

_contends, however, that..the. Agency's  general ppl_i cy expressed in section

 761.1,  to regulate only PCBs of 50 ppm or more was also intended to apply -  .

 to the  level  of.  cleanup .required.   The Agency  argues that  the exclusion for...,.

 PCBs  in concentrations of less than 50 ppm does not apply  because this 1s:_ i

 a case  where  the PCBs  were "diluted"  by the process of  cleaning  them off
          IP./
 the wall.      The  reference to dilution in the regulation  was to instances

 where the PCB concentration is reduced by increasing the volume  of the PCB

 contaminated  material,  either  a  liquid or a solid,  so as to lower the unit

 concentration  of PCBs  per unit of  material, and  this also  accords  with the
                             H/
 ordinary  meaning of  dilution.      The EPA's position, accordingly, that re-

 ducing  the concentration  by removing  PCBs from the  wall was  dilution  is

 rejected.  Examination  of the  language of sections  761.60(d)(l)  and (2)

 themselves and their legislative history  does  disclose, however,  that  the

 50 ppm  cut-off does  not apply  to the  clean  up  of spills of materials  or

 substances that  contain 50 ppm or  more  PCBs.

     Sections  761.60(d) and (d)(2)  are  in reality two separate provisions.

 Section 761.60(d)(l) relates to the spill  itself stating that spills and

 other uncontrolled discharges  constitute  the disposal of PCBs.   There  is
 IP/  Complainant's brief at 7-8.

 IV  See Preamble to PCB Ban Rule, 44 Fed. Reg. 31518, 31521  (May 31, 1979);
 See also, Tr. 71, 102.  The EPA cites a dictionary definition where "dilution"
 is defined to include not only the addition of water or the like but also to
 "make fainter", which arguably might include not only the addition of a
 "diluent" but also removal of part of the substance.  Reply brief at 7.  The
 most that can be said, however, is that all  dictionary definitions of the
 word apparently do not agree.  See Respondent's reply brief at 5.

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                                     10

 nothing said about  cleanup.   Read literally, it would appear to moke spills

 and uncontrolled  discharges  illegal  in  and of themselves, since they are

 not one of the  authorized  forms of "disposal.  Section 761.60(d)(2)  re-

 lates to the disposal  of PCBs  resulting from cleaning up and removing the

 spilled or discharged  PCBs.   Prior to its amendment in 1982, section 761.60

 (d)(2) also contained  language with  respect to determining whether the spill
•-        -                                               VLI
 had resulted in a contamination level of 50 ppm or more.     That language',.

 would appear to refer  to the  disposal of PCB contaminated materials and not to

 a  level  of cleanup  of  the  spilled PCBs.  In any event, that it was not intended

 to set a level of cleanup  is made clear from the history of the 1982 amendment.

      The EPA originally proposed to amend section 761.60(d) by addin.g a

 provision  that would require that contaminated material  resulting from the

 spills,  leaks and other uncontrolled discharges be cleaned up to prexisting

 background levels of PCBs  where there is a risk of exposure to water, human

 food,  or animal feed,.that any.visible signs of PCB contamination must be
                                                                        I!/
 removed, and that in all cases cleanup is required to  below 50 ppm PCBs.

 The EPA, however, did  not  adopt the proposal  and instead,  deleted the second

 sentence of  section 761.60(d)(2),  which referred to testing to determine the

 level  of PCB contamination resulting from the spill.  It explained its

 action as  follows:

                       The proposal  also contained requirements
                    for cleanup of PCB contamination resulting
                    from spills, leaks, and other uncontrolled
                    discharges of  PCBs.   Comments  in response
                    to these provisions varied.   Some  comments
                    stated  that a  requirement  for  level  of
                    cleanup should be set,  but  that cleanup to
 12/  See supra  at 7.

 13/  47 Fed. Reg. 17443 (April  22, 1982).

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                                    11
                    a concentration of 50 ppm was alv/ays appro-
                    priate.  Other comments expressed concern
                    about setting any specific requirements for
                    level of cleanup at this time and about how  •;.-...
                    these levels would be determined in the
                    field.  Still others approved of the standards
                    set in the proposed rule.- ••  ••—••"  ••'••"
                        The Agency has decided not to include        =
                    language regarding the required level of clean-
                    up in this final rule..  A part of § 761.20(d)(2)
                    (formerly § 761.10(d) (2)), which was sometimes •-'-
                    construed as setting a required level of cleanup
                    has been deleted. 14/   ....
     General Electric argues that the Agency's refusal  to fix a level of
cleanup shows an intention to require that PCB concentration caused by spill
                                                     Ii/
need only be reduced to a concentration below 50 ppm.     In fact, however,
the Agency's explanation shows precisely the contrary,  namely, that the
Agency was concerned with the undesireability  of  establishing fixed levels
of cleanup which would be generally applicable to all situations.  Indeed,
its reason for deleting the second  sentence  in section  761.60(d)(2), was  to
dispel any implication that there was any such required level  of  cleanup.
In sum, nothing in  the Agency's  action  or in the  language of section 760.61(d),
as amended,  suggests that the Agency intended  to  limit  the cleanup of spills
to only where the concentration  is  below 50  ppm.
     The reasonable construction  of section  761.60(d),  as it now  reads and
in light of  its history,  is  that  the  spill itself of  PCBs in concentrations
of 50 ppm or more is an improper  disposal, and the cleanup is  an  element  of
V4/  47 Fed.  Reg.  37354 (August  25,  1982),
15/  Respondent's  brief at  15.

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                                    12

 the violation only insofar as it is to be considered in determining the
            .                        16/
 appropriate penalty in a given case. .

     General Electric argues that without some objective criterion in the  '

 regulation fixing.a level  of cleanup, the regulation would be void for
          U7    -•..:/•••
 vagueness.     The regulation, however, in making  a spill  illegal  per se

 can hardly be called vague.   Nor does making  the penalty dependent upon the .

 circumstances of a particular spill and the efforts made to clean  it up

 render the regulation too  indefinite.  To support  its  claim that due process

 requires that specific levels of cleanup must be set,  General  Electric cites

 cases which deal  either with the permissible  scope  of  regulation where First

 Amendment rights are concerned or with the specificity of  the definition of
        W
 a crime.     Such cases are  not controlling in determining the scope of

 regulations promulgated pursuant to remedial  civil  legislation such as TSCA.

 See Brennan v.  Occupational  Safety and Health Review Comm.,  505 F.2d 869, 872

 (10th Cir. 1974).   Of course.,  even in civil legislation  a  party cannot held to

 a standard which it cannot  reasonably be be expected to  know about.  Id at 872.
16/  This construction  is  consistent with the  response which the Agency
made in the  preamble to the amended PCB Ban Rule to the comment that
under the amended  rule  the Agency would charge a party with unauthorized
disposal  when. PCBs are  spilled or leaked during authorized use of electrical
equipment but  prompt cleanup  is  initiated.  The Agency said that it will  not
charge a  party  with a disposal violation if the spill or leak occurs  during
authorized use  of  electrical  equipment and adequate cleanup measures  are
initiated within 48 hours.  47 Fed. Reg.  37354 (August 25, 1982).

17/  Respondent's  brief at 24-25.

18/  Respondent's  brief at 24-25.

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                                     13

 That,  however,  is  not the  case here.  There  is  no  question  but  that "
                                                                   19/
 General. Electric ^knew that  it must clean up  spilled  PCBs  promptly.

 Contrary to what General Electric contends,  the EPA  is  not  seeking to  hold
   .-....-.                                          2SJ
 General  Electric:to  some unpublished arbitrarily determined  standard.   • •••-

 The EPA  refers  generally to the  requirement  that spills be  cleaned up  to
                     2V/
 "background" levels.    • The purport of Dr.  Clark's  testimony and  of his .    :

 memorandum  on which  the EPA-relies, however, is that spills  be  cleaned up    '

 to the lowest level  of concentration below 50 ppm  PCBs  which is practicably
                                                     22]
 attainable  through the use  of normal  cleanup methods.     The record in  this

 case demonstrates that simply by using a household cleaner,  Spic and Span,

 and an industrial solvent,   Freon, General  Electric was  able  to  clean up  the

 PCBs on  the wall to  a much  lower level  of concentration than wh=t  was
                        _23/
 originally  accomplished.     Nor can General Electric's original cleanup be

 be taken as a gauge of what would normally be done to clean  up  PCBs, since

 its efforts were directed entirely to the removal of asbestos,  and it  was  only
                                                                           24/
 by happenstance that the PCBs were brought down to a level of below  50 ppm.

 In contrast, Dr. Clark testified that the EPA's experience' with other  companies
19/  Although the cleanup was undertaken to remove asbestos, General Electric
does not deny that there was an obligation under the PCB Ban Rule to also
clean up PCBs.

20/  Respondent's brief at 21-24.

21/  Complainant's brief at 9.

_22/  Tr. 42-43; Complainant's Exhibit 4.

23/  See Findings of Fact Nos. 12 and 13.   The cleanup also required stripping
paint from the walls, but that resulted from General Electric repainting the
wall after the EPA had inspected the facility.  Tr. 148.

24/  See Findings of Fact Nos. 10B - 10F.

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                                    14


 had  shown that where the effort was specifically directed to removal of

 PCBs,  a  level of about 10 micrograms per hundred centimeters squared
                         K/
 could  be easily achieved.   -.-••.:

     General Electric also argues that requiring a cleanup only to

 50 ppm is consistent with the policy seemingly expressed by the Agency"--'  '•'••-

 in its preamble to the original PCB Ban Rule (40 Fed. Reg. 31514, 31516

 (May 31, 1979), that the burden of cleaning up to a lower level  outweighed .
                                                        26/
 the  risks associated with leaving such PCBs'unregulated.     In

 reading the preamble, however, it is evident that the Agency was concerned

 with the fact that it was technically impossible to eliminate the in-

 advertent production of PCBs during the manufacturing process, and as the

 Agency noted in its proposed rule, it was also concerned with the problem

 of regulating the diffuse and extremely numerous PCB sources of concentrations
25/  Tr. 42, Complainant's Exhibit 4.   One question in this  case  which is not
being resolved because it  is  not  necessary for  decision,  is  the appropriate
measurement for the concentration of PCBs  on the wall.   The  EPA uses  the ratio
of micrograms of PCBs  to the  100  cm^ of the wall  area  sampled.  General  Electric
converts the results into  ppm by  measuring the  PCBs wiped off  the wall  as a
percentage of the 10 ml  solvent solution into which the  wipe samples  were placed.
The concentration so determined would  vary with the quantity of solvent  solution
used as the denominator  of the fraction.  See Tr.  28-29,  170-71.   The EPA, however,
does not question General  Electric's ppm determinations,  and it is assumed,
therefore, that they accurately reflect the level  of PCB  concentration on the
wall and that the final  cleanup result achieved of less  than 1 ppm was within
the range considered acceptable by the EPA.

26/  Respondent's brief  at 18.

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                                    15
                                                27/
 below 50 ppm already present in the environment.     There is no indication

 that the EPA considered the particular question involved here, namely, how

 should the cleanup of spills and other uncontrolled discharges of PCBs in

 concentrations of. 50 ppm or.more be.treated. -  .

     In promulgating the PCB Ban Rule, the EPA, addressing the question of

 what concentrations of PCBs could be considered as significant, stated as
follows:
                        EPA considered a finite concentration
                    as the demarcation betv;een "significant" and
                    "insignificant exposure".   The chief reason
                    for not taking this approach, however,  is
                    that there simply is no rational  basis  for
                    selecting any particular exposure level  above
                    zero for the purposes of this regulation.  PCB's
                    are extremely persistent and  ubiquitous  in the
                    environment, bioconcentrate and bioaccumulcte
                    within many organisms,  induce a variety  of
                    adverse effects in humans  and laboratory mamimals,
                    and possess no known "no effect"  level  for some
                    of these effects.  Based on the existing infor-
                    mation on the environmental  risks associated with
                    exposure.to PCB's (summarized in  the .Support
                    Document),  it is  apparent  that there is  no finite
                    level  at which continuing  releases  in the environ-
                    ment could  be regarded  as  insignificant.   Accord-
                    ingly, the  Administrator has  determined  that any
                    exposure to PCB's is significant  and shall  not be
                    permitted unless  explicitly authorized  or exempted.  28/
211  See 43 Fed.  Reg.  24804  (June  7,  1978).   See  also  the  discussion  of
tTTe 50 ppm cutoff in  Environmental  Defense Fund v.  EPA,  636  F.2d  1267, 1279-
1281  (D.C. Cir.  1980).   In that  case,  the court voided the 50  ppm cutoff
finding that the  EPA  had  not  shown  that  it had sufficiently  considered
whether the cutoff provided  adequate  protection for human  health  and
the environment.   636  F.2d at  1284.
     Preamble to the  proposed  rule,  43 Fed.  Reg.  24805  (June  7,  1978).   The
EPA adhered  to this reasoning  in  its final  rule.   See 44  Fed.  Reg.  31518
(May 31,  1979).   The  concerns  expressed  about  the hazards  of  any  exposure
to PCBs were reiterated  in  Dr. Clark's testimony'.   See  Tr.  40-42.

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                                    16
                                        i
      In  view  of  the  policy expressed therein, the 50 ppm cutoff should not
:                                        i
 be construed  as  applying to situations which result in adding PCBs to the

 environment unless it is clear that the EPA so intended.  Here it is neither

 clear  from the spill provisions themselves nor from their history that the

 EPA intended  this" result."".--"   -   .  .

     Accordingly, it is concluded that the spilled PCBs found on the .wall:...

Jit the time of inspection had not  been  disposed of in accordance with the
                                    2SJ           :
 requirements  of  40 C.F.R. 761.60(d).

                               The Penalty

     The statutory criteria for assessing  penalties under TSCA,  section 16(a)

 are listed in section 16(a)(2)(B), 15 U.S.C. 2615(a)(2)(B), which provides

 as follows:

          In  determining the amount of  a civil  penalty, the Administrator
          shall  take into account  the nature,  circumstances, extent, and
          gravity of the violation or violations  and, with respect to the
          violator,  ability to pay, effect on  ability to continue to do
          business,  any history of prior such  violations, the degree of
          culpablity, and such other matters as justice may require.

     To provide  guidance on the assessment of  penalties under section 16,

the  EPA enforcement  staff has issued guidelines setting forth the general

policies it will  follow and has supplemented these guidelines with a
                                                                        30/
specific policy  for  assessing penalties  for violations  relating  to PCBs.
29/  The EPA has claimed no violation with  respect  to the spilled PCBs which
were cleaned up and disposed of in  the asbestos landfill.   This  is  undoubtedly
in accordance with the advice given by the  EPA to General  Electric  that it
would take no action with respect to that disposal.   See  Complainant's
Exhibit 5; Respondent's Exhibit 3.

JO/  See 45 Fed. Reg. 59770-59783  (September  10, 1983).   The guidelines and
penalty policy are also included in the record as Complainant's  Exhibit 3.
Reference, however, will  be to the  Federal  Register  pages.

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                                     17
 The  procedural  rules  for these proceedings  require that  I consider  the
                1
 guidelines  and  PCB  penalty  policy  in determining  the  appropriate  penalty,
                .1
 and  that  if I assess'a penalty different in amount from  that proposed in
 :•  •-..   .....       .      •                    1L/
 the  complaint,  I must give  my reasons therefore.      .  .  .-:•• = -:

      The  PCB penalty  policy uses a matrix to establish an initial .penalty..

 based  on  the nature, extent, circumstances, and gravity  of the violation.
 •i         -  ' -
 The  initial penalty can then be adjusted upwards  or downwards depending

 upon consideration of the other statutory factors, i .e._, culpability,

 history of  such violations, ability to pay, ability to continue in  business,
                                              3Z/
 and such  other matters as justice may require.

     For  the violations charged in the four counts of the complaint, the

 EPA has requested a total  penalty of $20,000, broken down as  follows:  A

 penalty of  $1,500 for improper storage (Count I), $500 for improper marking

 (Count II), $1,000 for improper recordkeeping (Count III), and $17,000 for

 improper  disposal  (Count IV).   The only penalties questioned by General

 Electric  as excessive are the  $1,000 penalty for improper marking and $17,000
                      33/
 for improper disposal.    General  Electric has not, however,  raised any issue
                                                                              x
 with respect to  its ability to pay such penalties or claimed  that payment

 would adversely  affect its ability to continue in business.

     The  improper  recordkeeping  violation  concerned General  Electric's failure

 to show the date on which one  55-gallon drum of PCB solids was removed from

 service, the date  it was  placed  in  storage  for disposal,  and  the  total
J31_/  40 C.F.R. 22.27(b).

32/  45 Fed.  Reg.  59777.

337  Respondent's  brief at 2.

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                                    18

                          )  347
 weight in  kilograms  of  PCBs.     The EPA classified this as a major  record-

 keeping  violation  (in assessing the probability of causing damage),  but of
 -•-...                                                 35/
 minor extent because of the relatively small amount of PCBs involved.
 General  Electric  claims that the penalty is excessive since the drum  itself

.and  its  contents  were identified, they were only a small part of the  PCBs

 handled,  and  General Electric did comply with respect to the other PCBs
              _36/
 handled  by it.

      The  information in the annual document is required to assist the EPA

 in determining compliance with PCB requirements and to assist owners and

 operators in  maintaining effective inventory control  of PCBs and insuring
                37/
 timely disposal.     It seems self-evident that the date a PCB container

 has  been  removed  from service and the date it has been placed in storage

 for  disposal  are  important for both the EPA and General  Electric in

 determining whether it was being handled in accordance with the PCB Ban
                    38/
 Rule's requirements.     The weight of the PCBs in kilograms is also

 important in  determining whether all  quantities of PCBs  shown in the annual

 report have been  accounted for.   Consequently, the violation was properly
 34/  Finding of Fact No. 5.

 35/  Complainant's Exhibit 10.

 36/  Respondent's brief at 10-11.

 37/  See preamble to proposed disposal  and marking rule,  42 Fed.  Reg.
 26570 (May 24, 1977); Bell and  Howell  Co., (TSCA-V-C-033,  034,  035)
 (Final Decision, December 2, 1983)  at  8.

 38/  The PCB Ban Rule,  for example,  has different  disposal  requirements for
 PCB containers stored before January 1, 1983,  than for those stored
 afterwards.  40 C.F.R.  761.65(a).   Also the date a PCB container  has been
 removed from service is important  in determining whether  the temporary
 storage requirements have been  complied with.   See 40 C.F.R.  761.65(c)(l).

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                                     19
 classified  as  a major  recqrdkeeping  violation.   It  is  true  as  General  Electric
 points  out, that the penalty policy  gives  as  an  example of  a minor  recordkeeping
                                 •i                         &
 violation the  "omission of the date  of transfers of  PCBs."     There
 is  no reason to_assume .from this that the  EPA would  also  consider the  .:..— :..
 omission of the'total .weight of  PCBs as minor.   Further,  it is highly
 questionable whether this was intended to  refer  to the omission of  such  -
 significant information as the dates of removal  of an item  from service
 and  of  placing it in storage.  In fact, there is no  reference to the
 "transfers" of PCBs in the records required of owners and operators of
 facilities, although there is such a reference in the records required
                                     40/
 from disposal  and storage facilities.
     I  also find that General Electric has not shown any  reason why the  initial
 penalty set by the penalty policy should be reduced because of any mitigating
 circumstances.  No explanation for omitting the  information is given other than
 one which General  Electric makes for the first time i-n its brief that the
 drum was used to hold PCB contaminated items from transformer servicing  and
                                   4V
 cleanup that occurred periodically.     Assuming this is true, perhaps some
 variation in the way the information was reported in the annual document
 might have been in order.   It would not justify omitting all information about
 the dates the  PCBs were removed from service or stored for disposal, which is
 what General Electric appears to have done.
     I find, accordingly,  that  $1,000 is the appropriate penalty for the
 recordkeeping  violation.
_39/  General  Electric's brief at 11.  See 45 Fed. Reg. 59780.
_40/  See section 761.80(b) (2).
41 /  Respondent's brief at 10.

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                                    20

               J
      With  respect to the disposal violation, the EPA classifies the  violation

 as  significant in extent of potential  damage and at the highest level in
                               42/•
 terms of probability of damage.     The significant category was arrived  by

 estimating that the contaminated area of wall was between 150 square feet
                    437
 and 750 square feet.     Under the penalty policy all disposal violations, are
                                                                           .447
 assigned the highest level, i.e. considered as most likely to cause damage.

      The category into which the violation falls is based upon both the

 concentration of PCBs and the amount.   The EPA considered only the extent

 of  the contaminated wall and that it was located in an occupied work area,
                                                                     _45/
 but  did not attempt to ascertain exactly how much PCBs were involved.

 General Electric correctly points out  that by so doino ,  the EPA was not
                                    ^67
 properly applying the penalty policy.      The policy states that when

 different measurements of quantity would result in a particular violation

 falling into more than one category, the category should  be determined by
                                                            il/
 the  actual  weight in kilograms if this information is known.     The EPA
                                                                          48/
 argues that it had no way to reliably  measure the weight  of PCBs involved.

 I find, however,  that that argument  is not supported by the record and
42/  Complainant's Exhibit 10.

_43/  Tr. 66.

44/  45 Fed.  Reg.  59778.   See also explanation for  levels of probability of
damage in the TSCA guidelines,  45 Fed.  Reg.  59772.

45/  Tr. 67-68, 73-74,  77.

46_/  Respondent's  brief at 27-28.

£77  45 Fed.  Reg.  59779.

48/  Complainant's reply  brief  at 11.

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                                     21

 that  there was information from which the  EPA  could  have ascertained the

 weight  in kilograms for purpose of determining the proper  penalty matrix.

 Measurements made by General Electric at the time of the spill indicated that
                                                                           49/
 less  than ten pounds of oil containing about 75,000  ppm PCBs were spilled.

 This  would amount to a quantity considerably below the 1,000 kilogram  level
                                                        5_0/
 which separates the minor from the significant category.     The quantity  of

 PCBs  not originally cleaned up would be even smaller and probably very much -
                                                                517 '
 smaller, given the concentration found on the  wall of of 13 ppm.     True

 there is the possibility that some of the PCBs may have volatilized between

 March 1982,  when the original  cleanup was completed, and October 1982, when
                        527
 the inspection occurred.     Nevertheless, the concentration of PCBs

 regaining on the wall  after the original  cleanup was still  undoubtedly jvjch
497  Tr. 92-94; Complainant's Exhibit 5.  In its conversation with Mr. Homer
FT the EPA, General  Electric stated that it estimated the amount of oil
spilled to be two to three quarts.  Complainant's Exhibit 5.  The quantity
categories in the penalty policy are based on the assumption of an average
density of PCB fluids of 10 Ibs. per gallon.  45 Fed. Reg. 59779.  Using that
assumption, the spill would have amounted to between 5 and 7.5 pounds of oil.

50/  45 Fed. Reg. 59777.  One pound is approximately equal to 0.45 kilograms.
See U.S. Department  of Commerce, National Bureau of Standards, NBS Letter
Circular 1051, Rev.  Sept. 1976.

51/  Finding of Fact No. 9.

52/  Ms. McKinley testified that there would be no volatilization of PCBs
because of their low vapor pressure.   Tr. 99-100.  Dr. Clark pointed out,
however, that also affecting the ability of PCBs to volatilize besides their
vapor pressure is the extent of  surface  area exposed and the size of environ-
ment.  Tr. 49.

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                                      22


   closer to that found at the time of inspection, than to the original

                              53/
 ,  concentration of 75,000 ppm.     While it would seem more logical to measure
 i

 '  the extent of potential damage by the quantity of PCBs not cleaned up rather


 *. than by the original quantity spilled, that question need not be resolved- -'-•  --
-i

 /  since in either case'the quantity was less than 1,000 kilograms."-" - ------   ,


       The burden is on the EPA to prove that .its proposed penalty is

              54/
   appropriate.     Here the EPA seeks to justify its penalty on the grounds that  :


   it is in accord with the penalty policy.   I find,  however, that under the


   penalty policy, this violation should be  classified as minor in extent of


   potential  damage, rather than significant, and as  such, the initially determined
                                           _55/
   penalty should be $5,000 and not $17,000.


       I also find that there are mitigating circumstances which justify a re-


   duction in the initially determined penalty.   The  TSCA penalty guidelines


   in accordance with the statutory standard, provide that consideration may also


   be given to the violator's  culpability, or lack thereof, which includes  the


   violator's knowledge of the potential  hazards  of its conduct and its

          _56/
   attitude.      The EPA would appear to characterize the violation as one

                                                                           1Z/
   evidencing total  disregard  of the  law and of the inherent dangers of PCB.


   Although General  Electric was mistaken as to its obligation under the rules


  with respect to cleaning up spills,  the circumstances  do not support  the EPA's
  5_3/  The EPA does  not  dispute  that  the  original cleanup  resulted  in removing

  some of the spilled  PCBs.   Also,  it  seems clear that  PCBs  are  not  highly

  volatile.   Tr.  49, 99-100.


  _54/  40 C.F.R.  22.24.


  557  45 Fed.  Reg.  59777.


  _56/  45 Fed.  Reg.  59773.


  57/  Complainant's brief  at  21.

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                                    23


 characterization of General Electric's conduct.  In view of the treatment in

 the  PCB  Ban Rule of PCBs in concentrations of less than 50 ppm, General Electric

 did  have some basis for assuming that it was under no obligation to clean up

 the  residue left on the wall after the original cleanup.  So far as I know, this .

 is the first case to squarely consider the question of whether the 50 ppm.cut-off
                                 I?/           -
 applies to the cleanup of spills.     Also to be considered is that General

 Electric on being requested to further cleanup the wall-did so and brought the

 remaining PCBs down to a level found satisfactory by the EPA.

     The penalty policy would apparently allow no downward adjustment for a

 violator who lacked sufficient knowledge of the potential  hazard created by his

 conduct, unless he also lacked control  over the situation  to prevent occurence
                 _59/
 of the violation.     I am not sure that that language is  necessarily applicable

 to a situation where the violator's belief that its conduct  did not create a

 potential hazard has some basis for it,  as appears to be the case  here.   Con-

 sequently,  taking into account both General  Electric's reasons  for not cleaning

 up the spill  completely and the fact that it  acted promptly  and thoroughly to

 correct the violation, I find  that  the  initially determined  penalty should  be

 reduced 25% and that $3,750, is the appropriate penalty for  this violation.
58/  The EPA brief at 8,  cites  language  in  Judge  Jones'  opinion  in  Electric
Service Co., TSCA-V-C-024 (Initial  Decision,  August  10,  1982), at 25,  to  the
effect that where a discharge of over 50 ppm  PCBs  occurs,  contamination which
through the process of dilution, reduces  the  level to  below  50 ppm,  is still
regulated by the PCB Ban  Rule.   The case, however, does  not  appear  to  have
dealt the question of whether reducing the  concentration of  PCBs  by  removing
them in a cleanup constitutes dilution.

59/  45 Fed. Reg. 59773.

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                                    24


     Accordingly, it is concluded that a total penalty of $6,750, should be

 assessed for the violations found in this case.

                                        60/
                                  ORDER

     Pursuant to section 16(a) of the Toxic Substances Control Act (15 U.S.C.

 2615(a)), a civil penalty of $6,750 is hereby assessed against Respondent

 General Electric Aircraft Engine Group, for the violations of the Act found

 herein.

     Payment of the full amount of the civil  penalty assessed shall  be made

 within sixty (60) days  of the service of the  final  order upon Respondent by

 forwarding to the Regional  Hearing Clerk a cashier's check or certified check

 :.3vable to tht United States of Series.
                                      Gerald  Harwood
                                      Administrative  Law Judge
January 27, 1984
60/  Unless an  appeal  is taken  pursuant  to  section  22.30  of  the  rules  of
practice or the Administrator elects to  review this decision on  his/her
own motion, the Initial Decision  shall become the final order of the
Administrator  (See  40  C.F.R. 22.27(c)).

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29

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                              UNITED STATES
                     ENVIRONMENTAL PROTECTION AGENCY

                         BEFORE THE ADMINISTRATOR
In the Matter of                       )
                                       )
     Cotter Corporation,               )
        Schwartzwalder Uranium Mine,   )   Docket No.  PCB-81-004
                                       )
                       Respondent      )
Toxic Substances Control Act —

     A leak from the draincock of a transformer is not a "spill" or "disposal"
where PCBs do not find their way to the ground in such an amount and concen-
tration as to eventually contaminate the environment or pose a hazard to man
or terrestrial or aquatic organisms.

Toxic Substances Control Act —

     Direct evidence that the surface of a container is in direct contact
with PCBs in order to qualify the container as a "PCB Container" is not
essential when,  under the facts, it would be unrealistic to find otherwise.

Toxic Substances Control Act —

     The marking of the area where transformers are located does not constitute
the required marking of the transformer itself.

Toxic Substances Control Act ~

     Removal of  capacitors from use does not constitute removal  from service
in the absence of direct evidence that they are PCB capacitors and are
intended for and have been stored for disposal.

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Appearances:

     For Respondent:
        Edward  J. McGrath, Esquire
        Charlotte L. Nietzel, Esquire
        Holme Roberts  & Owen
        1700 Broadway
        Denver, Colorado 80290
     For Complainant:

        Stephen B. Cherry, Esquire
        Kent  B. Connelly, Esquire
        David J. Janik, Esquire
        Environmental Protection Agency
        1860  Lincoln Street
        Denver, Colorado 80295

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                             INITIAL DECISION


 I.   This is a civil penalty proceeding initiated under Section 16(a) of the

 Toxic Substances Control Act (TSCA), 42 U.S.C. Section 2615(a).  This proceed-

 ing was commenced pursuant to the issuance of a Complaint by Director,

 Enforcement, Region VIII, Denver, Colorado, against Cotter Corporation

 (Cotter).  The Complaint in this matter alleges that Cotter violated certain

 provisions of TSCA and Environmental Protection Agency (EPA) regulations

 promulgated pursuant to Section 6(e) of TSCA (42 U.S.C. Section 2605(e)).

 Specifically, it is alleged that Cotter violated the marking,  storage, disposal,

 and record keeping provisions of TSCA and EPA's polychlorinated biphenyl (PCB)
                                                    I/
 regulations at Cotter's Schwartzwalder Uranium Mine.    Based  upon the

 alleged violations, in its Complaint EPA proposed a civil penalty of $106,950.

     The original Complaint in this matter, filed on April  23, 1981, and an

 Amended Complaint filed on April 30, 1981, were filed against  Cotter Corp-

 oration and Commonwealth Edison Company.  On May 20, 1981,  Answers,  Requests

 for Hearing, and Motions to Dismiss were filed by both Respondents.   After

 response by Complainant, Respondents' Motions to Dismiss were  denied on

 June 26, 1981.

     On September 10, 1981, the parties filed a Stipulation whereby  it was

 agreed that Complainant would move to dismiss this action as to Commonwealth

 Edison Company in exchange for a commitment by Cotter Corporation that it

 would not raise as an issue in this matter inability to pay the proposed
77Section 2614 of the Act (15 U.S.C. 2614) provides in pertinent  part:

     "It shall be unlawful for any person to - (1)  fail  or refuse to
   comply with (A) any rule promulgated or order issued  under Section  4,
   (B) any requirement prescribed by section 5 or 6,  or  (C)  any  rule
   promulgated or order issued under section 5 or 6;  —."

PCB rules were issued under section 6(e) (15 U.S.C. 2605(e)).

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                                  - 2 -
 penalty.   In  accordance with instructions and pursuant to Section 22.19



 of the "Consolidated Rules of Practice Governing the Administrative



 Assessment of Civil Penalties and the Revocation or Suspension of Permits"



 (Consolidated Rules), 40 C.F.R. Section 22.19, on September 11, 1981, the -



 parties made  a  prehean'ng exchange of information.  As agreed in the



 September  10, 1981 Stipulation, on September 17, 1981, Complainant filed



 a Motion to Dismiss Respondent, Commonwealth Edison Company.  That Motion



 was granted on  October 8, 1981.  On September 17, 1982, a Motion for



 Leave  to Amend  Answers was filed by Cotter.  After response by Complainant,



 that motion was denied on October 7, 1982.  A subsequent Motion to Certify



 the Order  of  the Presiding Officer Denying Motion for Leave to Amend



 Answer for Appeal to the Administrator and a Motion for Administrator to



 Review Order  also were denied.



     On March 29, 30 and 31, 1983, hearing was held in Denver, Colorado.



     During a prehearing conference, the parties stipulated to the dismissal



 of Counts  II  and IV, the alleged marking violations at substation 4160



 ($11,500.00), and the alleged marking violations concerning line material



 company transformers ($11,500.00).  Also stipulated was the admissibility



 of the Federal  Mine Safety and Health Administration (FMSHA) citations



 (Cotter Exhibits 1-4), the presence of a PCB mark on the fence outside



 substation 2300, and to the absence of a PCB mark on the PCB transformer



 located inside  substation 2300.



     Upon  completion of the hearing, at the request of Complainant, the



-record was held open for further proceedings.  On June. 22, 1983, upon



 Complainant's Motion, the record was ordered closed.  A post hearing Motion



 to Strike  and Not Admit Evidence Relating to the EPA Rebuttal Case concern-



 ing contamination of the ground behind the compressor shed was filed by

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                                  - 3 -
Respondent.  Since the rebuttal  submitted by Complainant  at  the  hearing,
and which was the subject of this motion to strike,  was  incomplete  and
not subject to cross-examination, said Motion was  granted on July 28,
1983.
     Based upon the entire record,  including the briefs  and  proposed
findings and conclusions of the  parties, I  find that the  following  facts
are established.
                             FINDINGS OF FACT
     1.   Respondent,  Cotter Corporation, maintains  a place  of business,
the Schwartzwalder Uranium Mine,  near Golden,  Colorado.
     2.   On July 25,  1980, an anonymous complaint was received  by  personnel
at the Lakewood Colorado office  of  the U. S. Mine Safety  and Health Admin-
istration (MSHA) regarding the improper storage of PCBs  at Respondent's
Schwartzwalder Uranium Mine.
     3.   On July 25,  28, and 29, 1980, inspections  were  conducted  of the
Schwartzwalder facility by Mr. Michael L. Lynham of  MSHA.
     4.   On September 17, 1980,  an EPA inspection was conducted of
Respondent's facility  to determine  compliance with the PCB manufacturing,
processing, distribution in commerce, and use prohibitions.
     5.   EPA Participants in the inspection were Mr. Daniel W. Bench,
Mr. Paul Hanneman,  and Ms. Marilyn  Longan.
     6.   Written notice was provided to Respondent  prior to the inspection.
     7.   A single transformer and  a bank of capacitors were located at
substation 2300.

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                                  - 4 -
      8.    A  manufacturer's  nameplate on the single transformer located in
 substation 2300  indicated that the transformer contained 430 gallons of
 Inerteen  dielectric  fluid.
      9.    Inerteen is the brand name of a PCB dielectric fluid.
     10.    EPA  analysis of a sample from a spill below the draincock of
 the transformer  located  in substantion 2300 showed there to be 260,000
 parts per million PCBs in the spilled material.
     11.    Respondent's laboratory analysis of a split of the EPA sample
 taken of  the spillage below the draincock of the transformer in sub-
 station 2300 showed  there to be 11,000 parts per million PCBs in the spilled
 mate.ri al.
     12.    There  was  no PCB marking on the transformer located at substation
 2300.
     13.    Marking the fence surrounding the area where an in use transformer
 is  located does  not  constitute the required marking of the transformer
 itself.
     14.    A  leak from the draincock of a transformer is not a "spill" or
 "disposal" where PCBs do not find their way to the ground in such an amount
 and concentration as to eventually contaminate the environment or pose a
 hazard to  man  or terrestrial or aquatic organisms.
     15.    On February 11, 1980, a fire occurred in the compressor shed at
•the Cotter facility.
     16.    The  fire in the compressor shed resulted in the spillage of PCBs
 from a PCB capacitor located in the compressor shed.

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                                  - 5 -





    17.   The capacitor damaged during the February 11,  1980,  fire



contained 26% (260,000) parts per million PCBs.



    18.   Material from the fire cleanup was placed in a red drum which,  at



the time of MSHA and EPA inspections, was located in an  open area near  a



trailer house.



     19.  Included in the fire cleanup material  placed in the red drum  were



PCB-contaminated soils from behind the compressor shed,  PCB-contaminated



debris from inside the compressor shed, PCB-contaminated rags,  and  protective



clothing worn by Cotter employees during the cleanup.



     20.  The red drum was a PCB container and was not labeled  with a PCB



mark or other notation indicating the presence of PCBs in the  drum.



     21.  The red drum and its contents were stored for  disposal  and were  not



stored in a prescribed storage facility, nor was the area labeled with  a  PCB



mark.



     22.  The red drum was undated.



     23.  The residue of PCBs at the point of the draincock  in  the  transformer



at substation 4160 was not a spill  or improper disposal.   See Finding No.  14,



supra.



     24.  Fact that capacitors were  out of use at substation 800  does not



lead to conclusion that capacitors were out of service and,  therefore,



improperly stored.



     25.  Evidence that the two capacitors at substation  800 were PCB



capacitors was insufficient.



     26.  During the course of the  cleanup from  the February 11,  1980,  fire



in the compressor shed, material was "washed out" the  back of the compressor



shed.

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                                  - 6 -
     27.  EPA analysis of a sample taken from a depression in the ground



immediately behind the compressor shed disclosed the presence of 19,000



parts per million PCBs.



     28.  The "wash out" of the PCB spill  at  the compressor shed constituted



a spill and improper disposal  of PCBs.



     29.  The "bone yard" was  a "junk yard" containing discarded barrels,



cars, trucks, and unused and unserviceable capacitors.



     30.  The black drum located in the bone  yard was a PCB container and



was not marked.



     31.  The six PCB capacitors in the black drum were out-of-service



and were designated for disposal.



     32.  The capacitors in the black drum were neither marked nor stored



in an appropriate facility. The black drum was not labeled with a PCB



mark.



     33.  The two large G. E.  Pyranol capacitors on the ground,  five addi-



tional large G. E. capacitors  on the ground,  and two capacitors  in a



discarded panel box, all in the bone yard,  were all  PCB capacitors which



had been removed from service, were not properly marked,  and were improperly



stored for disposal.



     34.  The bone yard area itself was not marked with a PCB label  as



required.



     35.  Respondent had not developed and maintained records required by



Section 761.45(a) of the PCB regulations.

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                                  - 7 -
Substation 2300 (Counts I and X).

     At substation 2300, Respondent is alleged to have violated both the

marking and disposal requirements of the PCB regulations (Sections 761.20(a)(2)

or (c)(l) and 761.10(a)(l)).

           Count I- Marking of Transformer at Substation 2300.

     There is no dispute that a transformer located at substation 2300 bore

a manufacturer's nametag identifying it as a PCB transformer and that high

levels of PCBs were present in that transformer's dielectric fluid (Answer,

p. 9) (Bench Tr.,  p. 109) (Comp. Ex. 5) (Resp. Ex. 16).   Furthermore,

Respondent admits  that the transformer itself was not marked with an appro-

priate PCB mark (Answer, p. 9) (Tr., p. 6).  As a result, it is alleged that

Respondent violated Section 15(1 )(C) of TSCA and Section 761.20(a)(2) or

(c)(l) of the PCB  regulations.

     Respondent Cotter does not contest that the transformer contained more

than 500 ppm and thus was required to be marked.  It does,  however,  contest

the allegation that the transformer was not marked.  Respondent asserts

that it did not violate Section 761.20(a)(2) or (c)(l) because  the locked

gate leading into  the protected location of the transformer in  the substation

was marked with a  PCB label.

     Respondent argues at length that Answer 78 of "EPA's Final Ban  Rule:

Over 100 Questions & Answers to Help You Meet These Requirements" (June

1980), Cotter Exhibit 6  , "Q and A Document") indicates that a PCB  label

can be placed on a gate leading into a protected area.  It  reads:

          All labels (or marks) are to be put on the exterior of
          PCB items and transport vehicles in a place that  can  be
          easily seen or read by anyone inspecting or servicing
          them.  Q and A Document at 22.

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                                  - 8 -
     Respondent argues further that "PCB Item" is defined to include any
 "PCB Article Container" or "PCB Container," 40 C.F.R.  § 761.2(x).   The
 two terms mean, generally, any "device" used to contain "PCB Articles."
 40 C.F.R. § § 761.2(u), (v).  "PCB Article," in turn,  is defined to
 include transformers.  40 C.F.R. § 761.2(t).  Therefore, these definitions
 indicate that a "PCB Item" can be construed to be a substation which enclosed
 a PCB transformer.  Thus, Respondent asserts that placement  of a PCB label  on
 the outside of the substation complies with Answer 78.
     Question 79 and answer of the Q and A Document harmonize with  this
 reading.  They state:
          Do I have to label a PCB Capacitor that is on a pole
          or in a similar inaccessible location?
          If a PCB capacitor is installed in a "protected area"
          (e.g., on a power pole, structure or behind  a fence),
          the pole, structure or fence is to be labelled in  a
          place easily seen by interested persons,  such as
          servicemen.  Q and A Document at 23.
     The record in this case shows that the 2300 substation  was a protected
 area labelled with a PCB sign.  The parties stipulated prior to the hearing
 that a PCB label was on the gate leading into the substation.  Tr.  at 6, 7.
 A heavy gauge cyclone-type fence about seven feet tall completely encircled
 the substation.  Tr. at 172, 437.  Three strands of barbed wire surrounded
 the top of this fence.  Tr. at 437.  The gate was kept locked and was
 locked on the date of the EPA inspection.  Tr. at 145, 172.   Mr. Allen,  an
 employee of Respondent, had the only keys to this gate.   Tr.  at 437.
     Respondent argues that nothing in the Q and A  Document  suggests that
Answer 79 could not apply to transformers as well  as to capacitors,  thus

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                                  - 9 -





indicating that a transformer located behind a "protected area can be



labeled on a gate, a place easily seen by interested persons.  I  disagree.



This answer relates to capacitors and not transformers, and even  then,  only



when they are behind a fence and inaccessible.  This transformer  was not .



inaccessible.



     Respondent further argues that its good faith effort to comply with



the PCB labeling regulations at Substation 2300 should be given great weight.



Respondent argues that the record reveals that Cotter had made a  good faith



effort to comply with the marking rule prior to the EPA inspection.  Mr. Allen



testified that he relied on Answer 79 in the 0 and A Document when he



placed the PCB label on the gate, rather than on the transformer.  Cotter



Exhibit 6 is a copy of Allen's marked-up version of the 0 and A Document,



which shows the mark he made by Answer 79 when studying it in August of



1980.  He testified that he made the arrow by this answer "because it was



significant to this area [substation 2300]."  Tr. at 437.  Mr. Allen



interpreted the answer to apply to transformers, as well  as to capacitors,



because he "didn't see any relative difference" between transformers and



capacitors located in inaccessible and protected locations.  Tr.  at 437-38.



According to Mr. Allen, he "placed it on the gate rather than the transformer



because it was in a contained area, and anyone entering could be  sure to see



the sign."  Tr. at 437.



     The record also reveals that Respondent took corrective action with respect



to marking at Substation 2300 shortly after the inspection.  Mr.  Allen  testified



that one of the inspectors told him that the PCB label  on the gate should have



been on the transformer.  Tr. at 424.  Mr. Allen placed a PCB label on  the



transformer "within a few days after the inspection."  Tr. at 439.

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                                  - 10 -
     From a factual standpoint,  it is clear that  the fence surrounding Sub-



station 2300 was substantially removed from the one  PCB  transformer  inside



that substation.



     Marking the area where a transformer is located does  not  constitute



marking the transformer itself.   The PCB  regulations draw  a definite



distinction between an "area" and a specific item or article (see  Section



761.20(10) May 31, 1979,  where,  in addition to the marking requirements,



for the transformer itself, the  regulations require  that each  "storage



area" used to store PCBs  and PCB items for disposal" be  marked.  Unless



the PCB article itself is marked, there is no way that the public  in



general, or an employee in particular, can assess where  the danger from



PCB exposure may be.



     In this particular case, the dangers of marking a fence surrounding a



substation as opposed to  the enclosed PCB transformer itself must  be considered.



Unless an employee or other person entering Substation 2300 specifically knew



that the PCB article in that substantion  was the  center  transformer,  they



could have come in contact with  PCB oil which had spilled  from that  trans-



former without ever knowing that it was PCB oil.



     Respondent attempts  to bolster its argument  that marking  the  area is as



good as marking the article by citing the Q and A Document.  However,  in



citing the Q and A Document, Respondent misinterprets the  language of



Question and Answer 78, fails to cite the specific question and  answer



dealing with the marking  of PCB  transformers,  and overlooks an important



caveat set forth on the very first page of "Questions and  Answers."  The

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                                  - 11 -
answer to Question 78 states quite clearly that the mark goes on "the

exterior of PCB Items."  A whole substation cannot be deemed

to be a "PCB Item."

     Although Respondent is correct when it says that the definition of

PCB Item (761.2(x)) includes PCB Article Container or PCB Container,

Respondent is incorrect when it argues the definitions of PCB Article

Container and PCB Container mean, "generally, any 'device1 used to contain

PCB articles."  (Respondent's Initial Brief, page 9).  The definition of

both PCB Article Containers and PCB Articles include the following sorts

of containers: "any package, can, bottle, bag, barrel, drum, tank, or

other device. ..."  A "substation" does not fall within this category

of "containers" or "articles."

     The answer to Question 76, on the very same page, is directly on

point:

     76.  DO ALL TRANSFORMERS CONTAINING PCBs HAVE TO BE
          LABELED?

          PCB transformers, containing (sic) 500 ppm or greater
          PCB, are required to be labeled. . . .

The significance of that Q and A Document must be kept in context.  As

the caveat on page 1 states:

          This Booklet has been prepared by the Industry Assistance
          Office and the Chemical Control Division with EPA Office
          of Toxic Substances.  It is an informal  document, and
          persons are directed to the PCB Final Rule for specific
          legal requirements,  (emphasis added)

     Respondent's argument that its actions comported with its understanding

of the "Questions and Answers" are rejected.

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                                  - 12 -
     Respondent's argument that "it made a good faith effort  to comply with



the marking rule" and as a result should not be penalized,  must also be



rejected.  The Toxic Substances Control  Act was signed into law on October 11,



1976, and became effective January 1,  1977.  EPA first promulgated PCB



regulations applicable to Respondent's facility on February 17, 1978.   (43 F.R.



7150)   Under these regulations, as well as EPA's May 31,  1979, PCB regula-



tions, all PCB transformers were to be marked no later than January 1, 1979.



Sometime in August 1980, only after Mr.  Bench of EPA  took  the initiative of



sending the Q and A Document and the PCB regulations  to Respondent's



Mr. Vanlaninghan did Respondent's representative place a mark in the vicinity



of the PCB transformer.  (Allen Tr., p.  415-419 and 437-438).



                  Count X - Disposal at  Substation 2300



     During EPA's September 17, 1980,  inspection, PCB residue was observed



below the draincock of the PCB transformer located in Substation 2300  (Bench  Tr.,



p. 108) (Hanneman Tr., p. 172).  The residue was on an unbermed concrete pad



and completely exposed to wind, rain,  and other weather (Hanneman Tr., p.  173-



174).  A sample of the residue was taken by the EPA inspectors and "split"



with Respondent.  Both EPA's and Respondent's analyses of  the split sample



established that the residue contained high levels of PCBs.   The EPA analysis



showed there to be 260,000 ppm PCB and the Cotter analysis  showed there to be



11,000 ppm PCB (Comp.  Ex. 5) (Resp. Ex.  16).  Regardless of which analysis



is relied upon, it is  obvious that there was a significant  PCB residue on  the



concrete pad.   Complainant alleges that  this constitutes a  "spill" and,



therefore, improper disposal of PCBs constituting a violation of Section

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                                  - 13 -
     EPA relies on Section 761.10(d)(l) of the PCB regulations in asserting

this violation, which reads:

          Spills and other uncontrolled discharges of PCBs
          constitute the disposal  of PCBs.

Two EPA administrative decisions,  however, suggest that this provision  cannot

create liability for the type of leak encountered at Substation 2300.   In  re

Liberty Light & Power, TSCA No. VI-8C (Decision by Administrative Law

Judge Thomas B. Yost, April 7, 1981), aff'd, TSCA Appeal No. 81-4 (Decision

by Judicial Officer Ronald L.  McCallum, October 27, 1981);  In the Matter

of National Railroad Passenger Corp.  (AMTRAK), TSCA No. VI-24C (Decision

by Administrative Law Judge Gerald Harwood), rev'd.  TSCA appeal,  No. 82-1

(Decision by Judicial Officer McCallum, April 27, 1982).

     Liberty Light dealt with a situation similar to the one at issue here.

In Liberty Light, "a small quantity of PCBs leaked from a stored  PCB

capacitor onto a supporting concrete pad."  The concrete pad,  which had

no curbing, was outdoors with no roof or walls.  The percentage of PCBs

found in a sample taken from dirt  and debris under the capacitor  "was

rather high." The EPA inspector observed no flow from the leak.  Judge

Yost pointed out in his Initial Decision that EPA presented  no evidence

to show that the oily substance ever left the immediate area of the

capacitor or ran off the concrete  pad.  Neither has  there been such a

showing here.

     Judge Yost held that a leak on concrete was not a spill within the mean-

ing of the PCB regulations.  He reasoned that the PCB regulations envision  a

"spill" as "an event where PCBs find their way to the ground in such an amount

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                                  -  14  -
and concentration as to eventually  contaminate the environment or pose  a
hazard to man or terrestrial  or aquatic  organisms."
     Judicial Officer.McCallum, in  affirming Judge Yost's decision,  in  the Final
Decision, provided an extended  rationale as to why a  leak should not trigger
disposal liability under the  PCB regulations.  According to Judicial
Officer McCallum, "the language of  the regulations is unclear and misleading,
and as a consequence, it would  be manifestly unfair to impose a monetary
penalty on anyone who failed  to interpret the regulations in a manner advocated
by complainant."  And that, while EPA specifically defined the term
"leak," see 40 CFR § 761.2(m),  it did not include this word under the
definition of "disposal." See 40 CFR § 761.2(h).  The final decision
rejected EPA's argument, which  was  based on Section 761.10(d)(l), the same
provision cited in the EPA Complaint against Respondent here.  According  to
Judicial Officer McCallum, Section  761.10(d)(l) was contained in Subpart
B, entitled Disposal of PCBs  and PCB Items, rather than in a Subpart A
definitions section.  "Obviously no one  should have to follow such a
circuitous route simply to find out whether penalties attach." Judicial
Officer McCallum further pointed to the  storage regulations in Subpart  E,
Annex III, which address "leaks" comprehensively.  According to his Final
Decision, the storage regulations proscribe improper storage of leaking
PCBs, but neither they nor the  disposal  regulations proscribe the leak
itself.
     Judicial Officer McCallum  set  aside, in part, the initial AMTRAK decision
based on his appeal  decision  in Liberty  Light.  AMTRAK dealt with the "weeping"
of a small amount of fluid around a transformer terminal.  In an opinion

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                                  - 15 -
written prior to the Liberty Light Final Decision, Judge Harwood held



that failure to clean or contain a leak was a disposal  violation,  although



the leak itself was not.  He based this decision on the risk that  PCBs



could be washed off the transformer by rain into the surrounding environ-



ment.  On appeal, Judicial Officer McCallum reversed this initial  decision



based on Liberty Light.  See also, Yaffee Iron and Metal  Company,  Inc.,.



TSCA No. V1-1C.  (Decision by Administrative Law Judge  Herbert L.  Perlman,



March 27, 1981)  (A sticky PCB mixture on the side of a drum was not  a  disposal



violation.



     The leak at issue here was similar to the one described in Liberty Light.



The leak on the concrete slab of Substation 2300 was from the draincock of the



transformer.  Tr. at 175.  According to Messrs. Bench and Hanneman, the spot



was about 10 or 12 inches in diameter.  Tr. at 108, 172-73.   Mr. Allen



testified that the spot was three inches by two and one-half inches.  Tr. at



464.  The spot was entirely on the eight foot square concrete pad.  Tr. at



173, 174, 212.  As with Liberty Light, EPA presented no evidence to show



any flow or that the oily substance had run off the concrete slab.  See



Tr. at 144.  Mr. Allen testified that the spot was dry.  Tr. at 464.  Both



Messrs. Hanneman and Allen testified that the spot was  a  fair distance



from the edge of the pad.  Mr. Allen said that it was about  four feet from



the edge, Tr. at 414, and Mr. Hanneman said that it was two  to two and  one-



half feet from the edge, Tr. at 212.  EPA presented evidence that the



substation contained no containment curbing, Tr. at 112.   Liberty Light



also dealt with a leak on concrete with no curbing.

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                                  - 16 -
     Complainant argues in rebuttal  that  neither  Liberty  Light  nor  AMTRAK  are
on point.  It asserts that in the Liberty Light case,  the disposal  issue arose
regarding approximately forty-two PCB capacitors  that  were being stored  for
disposal, at least one of which was  observed to be  "leaking."   In the  AMTRAK
case, there was nothing on the record to  indicate that the "leakage on one
transformer was anything more than the 'weeping1  or 'sweating1  of a small
amount of fluid around the transformer's  terminals  resulting from temperature
variations causing the terminal's seals to expand and  contract."
     Complainant states that the spill at Substation 2300 does  not  involve
leakage from capacitors (or even transformers) stored  for disposal  and does not
involve a weeping transformer.  I agree.   At Substation 2300, the EPA  inspectors
observed a quantity of PCB oil below the  draincock  of  an  in-use and totally
intact PCB transformer.  There is no assertion by Complainant that  the material
weeped, seeped, or leaked from a seam in  the transformer  as was the case in both
Liberty Light and AMTRAK.  Complainant asserts that what  we are dealing  with
is clearly spillage and thus improper disposal.
     Respondent notes that Complainant refers to  the leak  under the
draincock of the Substation 2300 transformer as a "spill"  and in so doing,
ignores its own administrative precedents which address the definition of
"spill" under the PCB rules.  I  agree.   In  re Liberty Light &  Power,  supra.
governs the issue of whether the leak at  Substation 2300  was an illegal
disposal  of PCBs.  Judge Yost held that a leak of nonflowing highly
concentrated PCBs on a concrete pad  located  outside with  no roof, walls,

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                                  - 17 -
or containment curbing was not a spill or disposal of PCBs.  The facts of



the Liberty Light case cannot be distinguished from the situation encountered



at Substation 2300.  Judicial Officer McCallum also has rejected an



argument that the failure to clean up a leak is a disposal violation.  In



the Matter of National Railroad Passenger Corp.  (AMTRAK), supra.  Complain-



ant, in the AMTRAK case, had based its unsuccessful argument on the



possibility that PCBs can be washed into the environment,  the identical



argument raised here.



     While the distinction between stored and in-use transformers is factually



present in these cases, it is my opinion that the distinction is a minor one.



The storage regulations proscribe improper storage of leaking PCB transformers



which have been removed from service, but neither they nor the disposal



regulations proscribe the leak itself.  This is not to say that a leak



from an in-use transformer cannot or will not be construed as a spill or



improper disposal  under any given set of facts.  The amount of the leak,



the amount of contamination,  and its impact on the environment will  weigh



heavily in such a  consideration.  However, those factors are not present



here.  For these reasons and those set out in the Initial  and Final  Liberty



Light decisions, Count X is dismissed.

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                                  - 18 -
                Red Drum - (Counts  III  and  VII) Failure To
                        Mark  and  Improper Storage

     Marking

     Complainant alleges that Respondent  failed to mark a red fifty-five

gallon drum located north of  Respondent's water treatment pond and  failed

to mark the area in which the drum  was  stored  in violation  of Section  15(1)

(c) of TSCA and 40 CFR 761.20(a)(l) and (10).

     There is considerable proof  on the record that the drums did contain

PCBs.  Mr. Lynham, the MSHA inspector,  testified that he was told by Mr.

Bayles, an employee of Respondent,  "that  the material (inside the drum)

was disposal of PCB contaminated  oil  from a compressor fire that occurred

on approximately February 11, 1980."   (Lynham  Tr., p. 56).  Later,  Mr.

Lynham testified that in subsequent conversations with Mr. Bayles and Mr.

Urban, also employees of Respondent,  that he was told that the drum

contained "...  materials used  in the cleanup resulting from a fire in

the compressor house that occurred  February 11 (1980), and PCB contaminated

materials were stored there."  (Lynham  Tr., p. 63).  Mr. Bench, an  EPA

inspector, testified that he  was  told that  the red drum contained,  ".  .

.cleanup from the capacitor that  burst  in the  compressor shed—clean up

materials."  (Bench Tr., p.  117).  Mr. Hanneman testified that he  was

told the contents of the drum contained soil and cleanup material from

the rupture of a. . .capacitor in the compressor room.  (Hanneman Tr., p.

176).  Mr. Hanneman also testified  that "we determined that a capacitor

had ruptured in the compressor shed,  and  that  a sample was taken of that

liquid, and in turn taken to  a laboratory.  The results of that sample

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                                   -  19 -
 was  26 percent  PCB  oil  of which  they  began  cleanup and the contents  of



 the  drum were the  results of  that  cleanup."  (Hanneman Tr., p.  176).  Mr.



 Allen testified that, among other  things, the red drum had a quantity of



 material  containing 26% PCBs  (Allen Jr.,  p. 489).  In its Answer, Respondent



 states that  "Mr. Allen  stated that the  drum contained materials used to



 clean up  a minute  amount  of PCBs that  leaked from a capacitor when a



 compressor exploded in  a  shed in February of 1980.  Such  materials included



 rags, gloves, clothes,  and a  small amount of dirt cleaned up on the



 concrete  floor  inside the shed."  (Answer,  p.  11).  There is no dispute



 that the  drum did  not have the prescribed PCB  mark.  Not  only is that



 fact established by EPA witnesses  Respondent admits to it in its Answer



 (Answer,  p.  11).   Further, the area in  which the  red drum was situated



 was  not posted  with a PCB mark (Hanneman Tr.,  p.  178).



      Respondent asserts that  to  prove  a marking violation,  EPA  must prove



 that the  red drum was a "PCB  container."  A PCB container is a  drum that



 (1)  contains PCBs  and (2) whose  surface(s)  has been in direct contact



 with PCBs.  40  CFR  § 761.2(v).  And that Complainant's brief argues only



.that the  drum "did  contain PCBs."   Brief at 14.   While Respondent admits



 that the  content of the red drum was material  used in the cleanup in the



 compressor shed, such as  rags, soil, cleanup gear,  etc.   It argues that



 Complainant ignores half  of the  definition  of  a "PCB container" — that the



 surface of the  container  has  been  in direct contact with  PCBs,  Respondent



 asserts that the record lacks  evidence  that the surface of the  red drum had



 any  direct contact  with PCBs.  Further, only part of the  contents of the red



 drum were PCB contaminated materials.   The  drum also contained  materials



 with no evidence of PCB contamination,  such as a  valve and small dry type

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                                   - 20  -
transformers.   Respondent's Brief at 41.   The minute amount of PCBs  that

leaked out  of  the capacitor indicates  that only a small portion of any

solid materials inside the drum would  have contained PCBs.

     Mr. Allen testified that the red  drum contained floor weepings  from

inside the  shed.   Tr.  at 446, 489.  Several  witnesses testified that "soil1

was contained  in  the red drum.

     Respondent's defense that the red drum was not a PCB container  must

be'rejected.   While Complainant did not specifically allege or present

testimony that the surface of the container had been in direct contact

with PCBs,  it  would be unrealistic to  assume that the rags, dirt or  any

other contaminated materials in the red drum did not contain PCBs and that

they were not  in  direct contact with the  surface of the red drum.

     The red drum was  marked "DANGER, TOXIC  MATERIALS" with white spray

paint.  The mark  required by the PCB regulations 40 CFR 761.20(a)(l) is

illustrated in Figure  1 of Annex V:
                             (Boh/chlorinated Biphenyls)
                     A roxic environmentol contominont requiring
                    special handling and disposal in accordance with
                    U.S. Environmental Protection Agency Regulations
                     40 CFR 761—For Disposal Information contaa
                           the rtoareg U.S. E.P.A. Office.

                     In case of accident ex spill, call roll free the U.S.
                       Coast Guard Notional Response Center:
                                 600:424-SB02
                     Also Conioa
                     Tel. No.
                                  Figure  1

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                                   -  21  -



      The spray  painted  words  "DANGER, TOXIC  MATERIAL"  are  not  the equiva-
                                           I
 lent  of a PCB  label.  Not  only  do the painted words  fail to  notify the

 public-at-large,  or Respondent's  employees in particular,  of what material

 is in the drum,  it  does not provide  the critical  information found on a

 PCB label.   No  emergency phone  numbers  are given.  No  emergency  procedures

 are set forth.   In  short,  no  information  is  given which would  lead one to

 believe that the  toxic  material in the  drum  is  anything more than typical

 mining waste.   Additionally,  the  entire red  drum was eventually  placed in

 an 85 gallon drum,  which indicates Respondent considered it  to be a PCB

 container.

      It is  therefore  concluded  that  the PCB  container, red drum, was not

 marked as required.

      Storage

      Regarding  the  storage of the red drum,  Complainant alleges  that the

 evidence establishes  that, not  only  was the  drum  not stored  in an appropriate

 storage facility, it  was stored unsheltered  in  an open area.   (Lynham

 Tr.,  p. 65-66)  (Bench Tr., p. 120-121)  (Hanneman Tr.,  p. 178).

      And further, considering the contents of the red  drum,  it is almost

 impossible  to believe that Respondent did not intend to dispose  of the

 drum  and its contents.   Therefore, I find that  the drum and  its  contents

 were  being  stored for disposal.   As  such, the area in which  that drum was

 located was  a storage area used for  storage  of  PCBs  and PCB  items for

 disposal  and required a PCB mark.  It did not have one.

      Respondent alleges that  Complainant  has failed  to prove a violation of

"Section 761.20(10), requiring areas  that  "store PCBs and PCB items for disposal"

 to be labeled.  And that the  record  contains insufficient  evidence that

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                                  - 22 -
Respondent had made a conscious and deliberate  decision  to  dispose  of  the
red drum at the time of the EPA inspection.   And that Complainant must also
prove that Respondent intended to use the area  around the  red  drum  as  a
PCB storage area.
     As to the allegation that the storage of the  red drum did not  comply
with 40 CFR § 761.20(a)(l) and (10), Respondent argues that Complainant has
failed to prove the prerequisite to any violation  — that  the  red drum was being
stored for disposal.  And further, that Respondent did take measures to protect
the contents of the red drum such as placing the sturdy  and nonleaking drum
on a wooden pallet and tightly covering it with a  lid.
     It is my opinion that Respondent had made  a conscious  and deliberate
decision to dispose of the red drum and its  contents.  While no testimony
was illicited to this effect,  my considered  opinion is that Respondent had
no other choice than to dispose of the drum  and its contents.
     Even if Respondent had not intended to  use the area around the red drum
as a storage area, the record  is clear that  the drum was stored there  from
February 1980, until the arrival of the 85 gallon  drums, a  period far  in
excess of thirty days, a requirement delineated in 40 CFR  761.42(c) which
reads as follows:
          (c)(l) The following PCB Items may be stored temporarily
     in an area that does not  comply with the requirements  of  para-
     graph (b) for up to thirty days from the date of their removal
     from service, provided that a notation  is  attached  to  the PCB
     Item or a PCB Container (containing the item) indicating  the
     date the item was removed from service.
     As to whether or not the  red drum was being stored  for disposal as
stated above, I find it difficult or almost  impossible that the red drum
and its contents were destined for any other action.  I  therefore conclude

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                                  - 23 -





that the area was a disposal area, the area was not marked and that the



red drum and its contents were intended for disposal.  These conclusions



constitute a violation of Section 15(1)(c) of TSCA and Sections 761.20(a)(l)



and (10) of the PCB regulations.



                 Count XI — Disposal at Substation 4160



     During EPA's September 17, 1980, inspection, the inspectors observed



residue directly below the draincock of the center transformer in Substation



4160 (Bench Tr., p. 112-113) (Hanneman Tr., p. 173).  The residue, as was the



case at Substation 2300, was in an unsheltered area and susceptible to discharge



into the environment (Hanneman Tr., p. 173-174).  EPA analysis of a split



sample taken of this residue showed there to be 160 parts per million PCBs



in the spilled material.  Respondents analysis of its split revealed 90 parts



per million PCB (Comp. Ex. 5) (Resp. Ex. 16).  Complainant alleges that this



residue of PCBs at Substation 4160 constitutes a spill and improper disposal



and is a violation of Section 761.10(a)(l) of the PCB regulations.



     Respondent asserts that the evidence presented at the hearing indicates



that the leak at Substation 4160 did not constitute a "spill" as that term



was construed by Liberty Light.  Substation 4160 was surrounded by a chain



link fence that remained locked.  Tr. at 112, 145, 146.  See Cotter Exhibit



39.  Messrs. Bench and Hanneman testified that the center transformer of



the three transformers located at this substation caused the leak.  Tr. at



112-13, 175.  The leak covered three to four inches on the concrete pad



beneath the draincock.  Tr. at 173, 174.  According to Mr. Hanneman, the



concrete pad was approximately eight feet by fifteen, Tr. at 174, and the



spot was about two feet from the edge of the concrete pad.  Tr. at 212-213.



It seems likely that the spot was farther from the edge of the concrete

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                                  - 24 -
pad since the three inch spot was in the middle of an eight foot by fifteen
foot pad.  It is concluded from the size of the spot of residue, the size of
the concrete pad and the location of the transformer on the pad establishes
that no PCBs found their way to the ground in such an amount and concentra-
tion as to eventually contaminate the environment.
     The evidence indicates that the leak at Substation 4160 did not constitute
a spill and disposal as those terms were construed by Liberty Light and,
therefore, Count XI is dismissed.
          Substation 800 (Counts VI and IX) Failure To Mark And
                  Improper Storage Of Two PCB Capacitors

     At Substation 800, Respondent is alleged to have violated the marking
and storage requirements of the PCB regulations (Sections  761.20(a) and
761.10(b)(5)).  Complainant alleges that the marking violations at
Substation 800 were for "one out-of-service transformer and two out-of-
service capacitors" and that the storage violation was for an out-of-use
transformer.   However, evidence produced at hearing and cited by Complainant
in its Motion to Conform Pleadings to Proof filed  in this  matter on
August 12, 1983, limited the violations alleged at substation 800 to the
failure to mark  and the improper storage of two PCB  capacitors.
     Complainant asserts that the EPA inspectors  identified the two capacitors
in Substation 800 as "Custom Control  50 KVAR  460  volt  Weaver Capacitors"
(Hanneman Tr., p. 191-192)  (Comp. Ex. 7).   That the  two capacitors were not
in service and oil  was seeping from one of the two capacitors at the seam
(Bench Tr., p. 115) (Hanneman Tr.,  p. 192).   A wipe  sample taken of the oil
seeping from  the one capacitor confirmed that it  contained PCBs  (Comp.  Ex.  5)
(Saunders Tr., p. 246).   And further, that due to  the  general  condition

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                                   -  25  -
 of these two  capacitors,  there  can  be  no  doubt that the capacitors could not

 be reused and, thus, would  require  disposal  (Bench Tr., p. 115) (Sittner Tr.»

 p. 263). Neither  capacitor  was  marked  with a PCB mark  (Bench Tr., p. 116)

 and,  assuming they would  require disposal, the capacitors were stored improperly.

 As a  result,  Respondent is  alleged  to  have violated the PCB regulations

 for the  improper  marking  and  storage of the two capacitors located in

 Substation 800.

      The only support to  Complainant's argument that the capacitors were

 subject  to the PCB regulations, was established by analysis of a wipe

 sample taken  of oil emanating from  a seam of one of the capacitors (Comp.

 Ex. 5).   Respondent attempted to establish that the capacitors contained

 well  over three pounds of PCBs  by the  expert testimony of Mr. Sittner, a

 consultant in electrical  engineering:

      Q.    The capacitors  identified as the two Custom Control
           KVAR 50, 460 Volt Weaver  capacitor in Substation 800?

      A.    Only that they  exceed three  pounds very, very
           greatly each.

      JUDGE FINCH:  You said greatly?

      A.    Many times.  I  can  estimate  probably in the order
           of  30 to 40 pounds.

      JUDGE FINCH:  That is  each capacitor?

      A.    Each one, sir,  yes.   (Sittner Tr., p. 279-280)

      Respondent alleges that  the subject  capacitors were out-of-use, as

 opposed  to out-of-service.  Mr. Bench  testified that the subject capacitors

~were  not "energized" and  that in his opinion, the capacitors could not be

 reused  (Bench Tr., p. 115-116).  That  the expert testimony of Mr.  Sittner

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                                  - 26 -
was to the effect that when a capacitor "weeps or seeps or leaks.  .  .it
is generally disposed of. . . ."  Complainant assumes  then that the  subject
capacitors had been removed from service,  would require disposal,  and should
have been marked.  This required storage in an Annex III storage facility.
Substation 800 does not qualify as such.
     Respondent rebuts Complainant's allegations by  asserting that the
only evidence presented by Complainant regarding the type of dielectric fluid
in the capacitors was a sample result.  This sample, taken by Mr.  Hanneman,
indicated only that PCBs were present in one capacitor.  EPA Exhibit 5, #3.
PCBs are regulated only at concentrations  of 50 ppm  or more, 40 CFR  § 761.2(s).
Without a concentration level, the sample  result does  not indicate that the
capacitor was subject to the PCB regulations.  The sample tested was
Araclor 1254 which is a dielectric fluid containing  more than 50 ppm.
There is no evidence in the record that the other capacitor contained
PCBs.  The inspection report, EPA Exhibit  7, specifically states that
"neither nameplates [on these capacitors]  indicated  the type of dielectric
fluid."  Messrs. Bench and Hanneman also testified that the nameplates on
the capacitors did not indicate that they  were PCB capacitors.  Tr.  at
151, 192.
     Respondent further asserts that to establish a  marking violation with
respect to the capacitors at Substation 800, EPA must  prove that the capacitors
(1) contained 50 ppm or more of PCBs and (2) had been  removed from use. 40  CFR
§ 761,20(a)(5).  The record contains no evidence to  prove the first  element,
and contains insufficient evidence to prove the second element.
     Of the elements above to be proven, (1) becomes irrelevant and  immaterial
if it is determined that the two capacitors had not  been removed from use.

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                                   -  27  -
      With respect  to the  element  of  removal,  it  is  my  opinion  that EPA has



 failed to establish  a violation.   According to In the  Matter of Transformers



 Unlimited Corp., PCB No.  79-003  (Decision  by  Administrative Law Judge 0. F.



 Greene,  March  20,  1981),  EPA  must prove  that  the equipment was permanently



 out  of service and that it was not intended for  reuse. Respondent has



 established  that no  decision  had  been  made to take  the capacitors permanently



 out  of service and the very location of  the capacitors in the  underground



 substation indicates that no  such decision had been made.



      EPA attempts  to prove removal from  use by arguing that the capacitors



 were not in  service  and that  one  capacitor had weeped,  and by  pointing to



 "the general condition of these capacitors."   The term "not in service"



 means that the capacitors were disconnected,  not that  they were removed



 from use.  EPA Exhibit 7, the inspection report  of  Mr.Hanneman, states as



 to these two capacitors,  "Also two out-of-service capacitors were being



 stored at this substation. .  . ." There is no indication that Mr. Hanneman,



 at this  point, questioned anyone  as to whether or not  these capacitors



 were "removed  from use" or simply "out of  service." There is  a definite



 distinction  between  the two;  one  requiring a  label,  the other  not requiring



 a  label.  I  have been convinced by the evidence  presented that the latter is



 the  case. Further,  this  evidence fails  the Transformers Unlimited standard



 for  removal  from use.  Moreover,  Complainant  should not penalize a company



 due  to of an unknown circumstance that a capacitor  starts to weep.



 In-service or  disconnected equipment can start to weep at any  time.  _Tf a



 company  knows  that a capacitor has started to weep,  it can be  presumed to



"have made a  decision to permanently remove the capacitor from  service.  EPA



 should at least prove, however, that a responsible  person knows of the leak.

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                                  - 28 -





     The evidence establishes that, at the time of the EPA inspection,



Respondent had made no decision to remove the capacitors  from use permanently,



Mr. Allen testified that the capacitors were stored at this underground



substation "for possible reuse in the mine."  Tr.  at 454.   He was the



person responsible for any decision to take the capacitors permanently



out of service.  Tr. at 454.  At the time of the inspection,  Mr.  Allen



"had not made any decision to remove them from permanent  service."  Tr.



at 455.  Further, he would have made any decision  to dispose of these



capacitors and no such decision had been made at the time  of the EPA



inspection.  Tr. at 455.  The record contains no evidence  that Mr. Allen



made any statements to the EPA inspectors during the inspection suggesting



that he had made any decision to remove the capacitors from use permanently.



SeeTr. at 151, 153, 224, 455.



     In the M.atter of Briggs & Stratton Corp.,  TSCA Appeal No. 81-1



(February 4, 1981), held that the "mere removal  of PCBs from service, in and



of itself, does not necessarily or automatically signify  an intention to



dispose of them. . . ."   That decision held that  a company must  make a



conscious and deliberate decision to dispose of  PCB articles  to trigger



Annex III requirements.  In the Matter of Transformers Unlimited  Corp.,



supra, held that the type of evidence needed to  meet the Agency burden of



proof are statements made by a respondent indicating a decision to dispose



of equipment.



     Complainant's evidence that attempts to prove that the capacitors were



being stored for disposal is precisely the type  of evidence described in



Briggs & Stratton as inadequate.  Complainant's  argument that the capacitors



were being stored for disposal is based solely  on  the fact that they were



disconnected.

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                                  - 29 -





      No evidence was presented by Complainant that Mr. Allen,  the person



responsible for PCB compliance, knew that one of the capacitors at substa-



tion 800 had started to weep prior to the EPA inspection.  Without such



evidence, Complainant cannot establish a violation.  Complainant's argument



that the "general condition" of the capacitors indicates removal  from use



is rejected.  While Mr. Bench's and Mr. Sittner's testimony tend  to



support this allegation, Mr. Bench failed to substantiate his opinion,



see Tr. at 115-16, and Mr. Sittner stated that companies generally dispose



of capacitors that start to weep.   Tr. at 263.



     The evidence presented by Complainant fails to establish that the



capacitors were removed from use.   The opinions of the EPA inspectors are not



substantiated and are of no probative value.



     Counts VI and IX are hereby dismissed.



                       Area Behind Compressor Shed



     The issue here is very controversial.



     Complainant alleges that Respondent spilled and improperly disposed  of



PCBs in the area immediately behind Respondent's compressor shed,  thus



violating Section 761.10(a)(l) of  the PCB regulations.



     Complainant relies solely upon the fact that Mr.  Hanneman  and Mr.  Bench,



both EPA inspectors, testified that during the inspection they  were told  that



PCBs which had been spilled inside the compressor shed during a fire on



February 11, 1980, had been hosed  out the back of the shed (Hanneman Tr.,



p. 193) (Bench Tr., p. 128-129).  Further, it was Mr.  Hanneman's  testimony



that, behind the compressor shed ". . .there was a depression in  the ground,



probably two and one-half feet across, eighteen inches deep,  oily, black



goo on most of the soil that was there and standing water."  (Hanneman  Tr.,



p. 193).  Mr. Hanneman took a sample from that depression which revealed

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                                  - 30 -
 the presence  of  19,000  parts per million PCBs (Comp. Ex. 5 and 7).  The
 validity  of Mr.  Hanneman's sample is undisputed.
      It is also  undisputed that there had been a fire in the compressor
 shed which was caused by the explosion of a compressor.  This fire caused a
 capacitor to  heat  up and leak.  The capacitor did not explode.  As stated
 above, Complainant alleges that the contamination behind the compressor
 shed was  a direct  result of Respondent's efforts to hose the leaked PCBs
 out to the back  of the  shed.
      Respondent, however, asserts that the testimony of Messrs. Allen
 and Vanlaningham,  also  an employee of Respondent, indicate that this cleanup
 from the  leaking capacitor could not have caused the presence of PCBs
 behind the shed.   They  stated that on February 11, 1980, a compressor
 located in the compressor shed did explode, which caused one capacitor to
 heat up and leak.   Tr.  at 439.  They further testified that the capacitor
 leaked a  small amount of liquid on the concrete floor beneath the capacitor.
 The leak  covered approximately two by three inches, and was three-sixteenths
 to a quarter  of  an inch thick.  Tr. at 440, 475, 537.  Respondent's
 employee  took a  sample  of the content of the leak from the concrete to
 determine its contents, and sent the sample to Industrial Laboratories.
 At this point, it  should be parenthetically noted that neither Mr. Allen
 nor Mr. Vanlaningham were present at the compressor shed when the sampling
 and cleaning was accomplished, but rather these procedures were allegedly
 related to them  by an employee of Respondent.  Tr., p. 440.  According to
 Mr. Vanlaningham,  the sample used for testing took up to 90 percent of the
-content of the leak.  Tr. at 537-38.  After receipt of the results of the
 analysis  indicating a PCB content, Cotter Exhibit 18, Respondent cleaned up
 the rest  of the  liquid with trichlorethylene or acetone, which was absorbed
 and placed in the  red drum together with the absorbent material.  Tr. at 441.

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                                  - 31 -

Respondent repeated this process at least twice.  Tr. at 441.  After this
chemical cleaning process was completed, Respondent steam cleaned the
inside of the shed.  Tr. at 445, 538.  Messrs. Allen and Vanlaningham
testified that steam cleaning, which occurred after chemical clean up of
the leak, could not have caused the presence of PCBs behind the compressor
shed.  Tr. at 476, 537.
     Respondent further asserts that until the issuance of the EPA Complaint
on April 22, 1981, Messrs. Allen and Vanlaningham were not aware of the
presence of PCBs behind the compressor shed, Tr. at 435, 477, 527, 542.
And, therefore, had not attempted to clean up behind the compressor shed
prior to the EPA inspection.  Tr. at 527, 528.
     In furtherance of Respondent's defense, it is asserted that while
Complainant has failed to establish that Respondent caused the contamination
behind the compressor shed, Respondent also presented evidence as to what
might have caused the contamination.  Mr. Vanlaningham testified that a
Rural Electric Assocation ("REA") substation, not owned or controlled by
Respondent, was located in the area of the compressor shed until about
1972.  Tr. at 538.  See Cotter Exhibit 41, a picture of the Cotter site
at the time the REA substation was located there.
     Complainant does not dispute the fact that a Substation once occupied
the same general location as where the PCB spill was observed by the EPA
inspectors, but correctly observes that Respondent presented no evidence
whatsoever that PCBs were spilled by Rural Electric Association from that
                                 y
substation in that specific area.
2J  While there was some indication that Complainant might present rebuttal
to this contention by Respondent,  and the record was held open for that
purpose, the record was later closed upon motion by Complainant.

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                                  - 32 -


     While the stated positions of each party are plausible,  the best

evidence is on the side of Complainant.

     First, Carl Urban, an employee of Respondent,  told Mr.  Lynham,  an

inspector of the Mine Safety and Health Administration, who  inspected

Respondent's premises in July 1980, prior to Complainant's involvement,

as follows:

     A.    . . .the fire that had occurred on February 11, and
     that he [Carl Urban] had washed out the oil  and cleaned  up
     and put the material used to clean up the mess in the red
     barrel out by the white trailer that had toxic materials.

     Second, the inspection report of Mr. Hanneman  which sets forth  the

initial account of Complainant's first inspection of the shed site states:

"SPILL SITE (Located behind compressor shed, south  of the main office building)

     Mr. Sluga showed us the site of the burst PCB  capacitor  in the  compressor
building.  He said the liquid from the spill was  hosed off the concrete  floor
into the rear of the compressor building and out  onto the ground behind  the
building.  I took a soil sample (PH 800917-4) from grease- and oil-soaked
residue in a shallow depression in the ground, outside and at the rear of the
compressor building."

     Mr. Sluga, in spite of his position with Respondent,  was the person who

directed and accompanied Mr. Hanneman to the compressor shed  on this initial

visit by Complainant, and was the second employee who advised that the leak

was "hosed off."

     It was this statement concerning the "hose off" that prompted Mr. Hanne-

man to inspect behind the compressor shed.

     Mr. Allen, who testified most emphatically that the hosing out  of the

leaked PCBs did not occur, was not present  during the clean up procedures.

Therefore,  his testimony is given little weight.

     The court is convinced that the testimonies  of Mr.  Lynham and

Mr. Hanneman are the more accurate accounts  of what occurred  immediately

after the fire and leak.  This is not to say that additional  measures,

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                                  - 33 -


 such as those related by Mr. Allen, did not take place at a later time,

 but only after the original "hose off."

     It is concluded, therefore, that the action taken to "hose off" the

 "leak" constituted a spill and improper disposal of PCBs in violation of

 Section 761.10(a)(l) of the PCB regulations.

                   Bone Yard - Counts V, VIII and XIII

 Generally:

     Complainant alleges that Respondent violated the marking, storage,

 and disposal requirements of TSCA and the PCB regulations in the Bone

 Yard (Section 15(1)(C) of TSCA and Sections 761.20(a) or (c), 761.10(b)

 (5) and (c)(3), and 761.10(a)(l)).

     Complainant asserts that on the whole, it is important to under-

 stand that the Bone Yard should be viewed as nothing more than a highly

 disorganized area containing junk, old vehicles, and other discarded

 items.  Mr. Hanneman referred to the Bone Yard as a "junk yard" (Hanne-

 man Tr., p. 184).

     It is appropriate at this point to quote from EPA Ex. 7, the EPA

 Inspection Report regarding the official description of the Bone Yard by

 the inspectors.

 "BONE YARD (Located at the north end of the complex)

     Mr. Allen and Mr. Sluga took us to the "bone yard" at the north end
 of the Schwartzwalder complex.  The bone yard is an area about 100 yards
 long and 50 yards wide which appears to be a scrap yard where used equip-
 ment, empty barrels and junk cars and trucks are stored.  At the north end
 of this bone yard, Mr. Allen showed us the site where the unused and un-
 servicable capacitors were stored for disposal. . We found approximately 15
"PCB capacitors at this site, as follows:

     Five Large GE Pyranol Capacitors:  None appeared to be leaking; none
 had PCB marks.(Example: SN V91116 GE Pyranol 0.334 gallon — see photos
 #11 and #12; photo #11 is nameplate of SN V91116, at right knee of
 inspector in photo #12).  Because the remaining four capacitors were

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                                  - 34 -
scattered on the ground in the area around the panel  box in photo #12,
and they were in a possibly contaminated area, we did not get their
serial numbers.  They all appeared to be the same size as the example.

     Two Large GE Pyranol Capacitors;  GE SN .7920091  A080A, on the ground;
no PCB marks.  Because of the position of the other capacitor, we were
unable to get its serial number (see in front of  panel  box, next  to barrel,
in photo #12).

     Six Large PCB Capacitors:  Mr. Allen estimated that approximately  six
PCB capacitors were stored in a 55-gallon drum in the bone yard (see
photo #12), one of which was the burst capacitor  from the compressor
building.  Because of obvious leaking of PCB liquid and possible  contam-
ination, we did not count the exact number of capacitors in the barrel,
nor were we able to determine the size of the capacitors in the barrel.
The drum had no PCB mark, no lid, and none of the capacitors we could see
had PCB marks.

     Two GE Capacitors:  SN B37332 and SN B31968, each  containing 1.9
gallons of pyranol.  D~ne capacitor had a PCB mark;  both had manufacturer's
nameplates (see photo #14).  The capacitors were  sitting inside a metal
electrical panel box (gray box in front of inspector, photo #13).  One
of the capacitors was leaking onto the bottom of  the  panel box.  The wood
on the outside base of the box was also oil-soaked.  We were unable to
determine whether or not the ground was oil-soaked."

See EPA Exs. 12-C, 12-D, 12-G and page 6 of EPA Ex. 8.

                 Black Drum Containing Six PCB Capacitors

     It was the testimony of three different EPA  witnesses, Mr. Lynham,

Mr. Bench, and Mr. Hanneman, that they were told  by officials of  Respondent

that the uncovered black 55-gallon drum contained six PCB capacitors,

including the one which had burst in the compressor shed on February 11,

1980, a sample from which was found to contain 260,000  parts per  million

PCBs.  Mr. Lynham testified that he was told, during  conversations with

Mr. Allen and Mr. Bayles that the black drum in the Bone Yard contained

six Pyranol (a trade name for dielectric fluid containing PCBs) capacitors.

Mr. Lynham also testified that he read the manufacturer's nametag on the

capacitors and determined that they contained pyranol.   Lynham Tr.,  p. 67.

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                                  - 35 -
     Complainant alleges that there can be little dispute that the

capacitors in the black drum were out of service, leaking, and thus

designated for disposal.  Mr. Lynham testified that the uppermost  PCB

capacitor in the drum was punctured and leaking oil (Lynham Tr., pp. 66-

67, 69, and 84).  Mr. Bench also observed the capacitors in the drum

leaking oil (Bench Tr., p. 123).  Even Mr. Allen testified that he placed

capacitors in the drum because they were leaking (Allen Tr., p. 518).

While examining EPA Exhibit 12-G, Mr. Sittner further elaborated on the

upper-capacitor in the drum and discussed the general condition of that

capacitor:

     I would estimate right in the center of that lower compart-
     ment approximately three inches, and probably six inches
     above the ring of the 55 gallon drum appears to be two
     indentations.  The upper one looks almost like a hole.  The
     one three inches above may be just an indentation, and then
     on the left hand corner of the device, looks like a penetra-
     tion of the lower section of the capacitor.  Even if those
     are not holes through those, it would degrade and make the
     reuse of that device very doubtful, because it would be too
     close to the internal electrical foils and so on that are
     inside that capacitor.  It would cut down the electrical
     clearance.  (Sittner Tr., p. 265).

     And further, Complainant asserts that the capacitors in the black drum

were neither marked nor stored properly.  There were no PCB marks  on the

drum (Hanneman Tr., p. 182) (Lynham Tr., p. 70); the drums were not stored

in an appropriate storage facility, and the lid was off the drum at the

time of both the MSHA inspection and the EPA inspection (Lynham Tr., p. 69)

(Hanneman Tr., p. 189) (Comp. Ex. 8, p. 6) (Comp. Ex. 12-G).

     As in the instance of the red' drum, Respondent alleges that the black

drum is not a PCB container.

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                                  - 36 -
     To prove that a drum is a "PCB Container," Complainant must prove that
any PCBs contained in the barrel have touched the surfaces of the barrel.
     Respondent correctly asserts that the record contains no evidence
that any PCBs in any capacitor in the black barrel  had touched the
surface of the black barrel.
     None of the inspectors testified that they observed any fluid identi-
fied as PCBs from any capacitor touching the -sides  of the barrel.  Mr. Lynham,
testified that he saw only one Pyranol nameplate on those capacitors in
the black barrel.  That his testimony does not establish that the capacitor
with the Pyranol nameplate was the same one that, he claimed, had leaked
oil.  See Tr. at 67-68.  Further, Mr. Lynham never  testified that any oil
he claimed to have observed had touched the sides of the black barrel.
     Respondent further asserts that Messrs. Lynham, Bench and Hanneman
testified that they could not see inside the barrel to determine whether
any liquid had touched the sides of the barrel.  Tr. at 69, 87, 158, 221.
They observed no leaking on the outside of the black barrel and did not
turn it over to look at the bottom of it.  Tr. at 76, 86-87, 158 and
221-22.
     Complainant replies that the existence of particular specifications
in Annex III of the PCB regulations for PCB containers used to store
nonliquid PCBs clearly refute that contention (see  Section 761.42(c)(6)).
     The distinction between PCB Containers and PCB Article Containers
does not revolve around the presence or absence of  PCB liquids, but
rather around the manner in which the PCBs in that  container are enclosed.
The definition of PCB Article Containers is restricted to containers

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                                  - 37 -
holding PCB Articles and PCB Equipment which have maintained their structural

integrity; i.e., have not allowed the inside surface of the container to

become contaminated.

     In the case of the black drum located in the Bone Yard, there is no

doubt that it fits the definition of "PCB Article Container" and as such was

subject to the marking requirements.

     Mr. Allen did testify that a leaking PCB capacitor was placed in the

black drum.

     Q.    One was placed in there because it was leaking and
           you wanted to contain it?

     A.    That is correct.  (Allen Tr., p. 518)

     There were exposed PCBs within the black barrel resulting from a leak-

ing PCB capacitor.  As discussed above, by definition,  a drum holding PCBs

is a PCB Container.  A drum containing a leaking  PCB article is by defini-

tion a PCB Container.  It is concluded, therefore,  that the black  drum

is a PCB container which required a PCB mark.

     Respondent does not dispute the fact that the black barrel  was not

marked.  It is concluded that there was a violation of 761.20(a) on the

basis of the black drum in the Bone Yard.

                   Individual Capacitors In Black Drum

     Complainant alleges a violation of Section 761.20 (a)(3) and  (c)(2),

relating to high voltage capacitors.  High voltage capacitors are  ones

that operate at 2,000 volts or above  40 C.F.R. § 761.2(d)(2).   Mr. Allen

testified that all of the capacitors in the black barrel were 480  volts.

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                                  - 38 -





 Tr.  at  450-51.   EPA submitted no evidence to contradict his testimony



 except  that Mr.  Sittner, a private consulting engineer, testified that in



 his  opinion the  capacitor sticking out of the top of the black barrel



 contained  more than three pounds of dielectric fluid.



      This  statement by Mr. Sittner does not confirm or rebut that the



 capacitor  is  a large, high voltage capacitor as defined in Section 761.2



 (a)(2).  Complainant has not carried its burden of proof on this violation



 of failure to mark the large high voltage capacitor and same is hereby



 dismissed  upon the finding that the capacitor is a large low voltage



 capacitor.



      However, this large low voltage capacitor should have been marked



 if it had  been removed from use and was being stored for disposal.



      While there is considerable discussion by both Complainant and



 Respondent concerning the marking of other capacitors in the Bone Yard,



 i.e., two  large  G. E. Pyranol capacitors on the ground, five more large



 G. E. capacitors lying on the ground, and two capacitors in a discarded



 panel box, the evidence weighs in favor of Complainant that these were



 all  PCB  capacitors, which had been removed from use, not properly marked,



 and  were improperly stored for disposal.  Complainant's reasoning is as



 follows:



      Two Large G. E. Pyranol Capacitors



           It was the testimony of Mr. Hanneman that there were two



 capacitors on the ground in a second area of the Bone Yard (Hanneman Jr.,



.p. 187).   Mr. Hanneman was able to identify the manufacturer's nametag



 on one  of  the two capacitors (Serial number 7930091 A080A) and noted that

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                                  - 39 -
 it was a General Electric Pyranol capacitor  (Hanneman Jr., p. 187) '(Comp.



 Ex. 7).  Based on his expertise in the electrical field, when shown



 Complainant's Exhibit 8, page 6 (photo #12), Mr. Sittner testified that



 both .of the subject transformers contained more than three pounds of PCBs



 (Sittner Tr., p. 280).  Again, neither capacitor bore a PCB label (Bench



 Tr., p. 122-123) (Hanneman Tr., p. 182).  It is clear that Respondent



 violated the marking and storage requirements of the PCB regulations by



 not placing a PCB mark on these capacitors when they were removed from



 use and by not placing them in an appropriate storage area.



     Five Large G. E. Pyranol Capacitors



           During the EPA inspection, Mr. Hanneman noticed one group of



 five capacitors lying on the ground in the Bone Yard.   Mr. Hanneman



 observed that the five capacitors were of the same size and that one



 of the five — serial number V91116 — bore a manufacturer's nametag



 which identified it a "A 6E Pyranol capacitor containing .334 gallons



 of Pyranol."  (Comp. Ex. 7) (Hanneman Jr., p. 185).  Mr. Hanneman further



 observed that the capacitors in this group were "dirty and neglected."



 It was the testimony of Mr. Sittner that capacitor V91116 contained



 3.82 pounds of PCBs.  The capacitors in this group, then, were required



 by Section 761.20 to be marked with a PCB mark at the time of removal



 from use and stored in a proper storage facility.  None of these capa-



 citors were marked (Bench Tr., p.  122-123) (Hanneman Tr., p. 132), nor



were they stored in a storage facility meeting the requirements of



 Section 761.42.

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                                  - 40 -
     GE Capacitors



           During the September 17, 1980,  inspection,  the EPA inspectors



 observed two more capacitors sitting haphazardously  in the bottom of a



 discarded electrical panel box.  The two capacitors  bore manufacturer's



 nametags indicating that each contained 1.9 gallons  of Pyranol  (Comp. Ex.  7)



 (Comp. Ex. 8, p. 7) (Hanneman Tr., p. 190).  These two capacitors were



 stored for disposal.  They were leaking, stored improperly,  and one was



 unmarked.



     Both Mr. Bench and Mr. Hanneman observed oil in the bottom of the



 panel box which had spilled from the capacitors stored in the panel  box



 (Bench Tr., p. 123) (Hanneman Tr., p. 186).  Moreover, Mr. Allen testified



 that he was aware that one of the capacitors in the  electrical  panel box



 was leaking Pyranol (Allen Tr., p. 514).  Considering  the fact  that  the



 panel box was not enclosed and, in fact, was open to the elements, there



 was a definite potential for escape of PCBs into the environment.



     Mr. Hanneman testified that one of the two capacitors in the elec-



 trical panel box did have a PCB mark.  However,  it was Mr. Hanneman's



 further testimony that neither the second  capacitor  nor the  area in  which



 they were stored was marked (Hanneman Tr., p. 182-183).



     The marking violations in the Bone Yard are further established



 by Respondent's failure to mark the panel  box in which two out-of-service



 PCB capacitors were observed.  The panel box falls within the definition



 of "PCB Container."  Two EPA inspectors observed a Pyranol capacitor



-leaking onto the bottom of the box (Bench  Tr.,  p. 123) (Hanneman Tr.,



 p. 186).  Respondent argues that the PCB label  on one  of the two capacitors

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                                  - 41  -





constitutes labeling of the PCB container itself.  This argument is  rejected



for obvious reasons, i. e., the labeling of a capacitor in a PCB container



does not constitute labeling of the PCB container.



     The facts established in this case indicate that the subject capa-



citors were removed from use and,  in most instances,  could, not have  been



reused even if so desired by Respondent.  The capacitors located in  the



Bone Yard were not neatly stacked, sorted, and categorized.   They were



deposited randomly in four general areas (Hanneman  Tr., p. 17).   Some were



thrown leaking into a black barrel.  Some were thrown leaking into an



electrical panel.  Some were just  laid  on the ground.  At least  three



were identified as damaged and, thus,  as verified by  the expert  testimony



of Mr. Sittner (Sittner Tr., p. 265),  incapable of  being reused.



     Complainant has shown that some,  if not all, of  the capacitors  in



the Bone Yard were PCB capacitors, removed from use and not  marked and



were improperly stored for disposal and such a finding is hereby made.



                           Records — Count XIV



     Complainant alleges that Respondent violated the provisions of  Sec-



tion 761.45(a) in that the records required were not  being kept.



     At the commencement of the inspection, Mr. Bench "asked to  inspect



the official  PCB records."  Mr. Allen  said there were "no PCB records."



EPA Ex. 7.  Mr. Bench testified that he inquired of Mr. Boyles,  Mr.  Allen's



superior, about the records at the end  of the inspection as  well and



received the same response.  Tr. 105 and 129-30. Mr. Hanneman testified



to this same effect.  Tr. 171-172.



     Respondent asserts that "While Mr. Allen told  the EPA inspector



during the inspection that he had  no PCB records, Tr. 105, he thought the

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                                  - 42 -
inspectors wanted records on official forms.   Tr.  483.   And that since

an annual report was required to have been filed  for the year 1979 at

the time of the EPA inspection, Mr. Allen was preparing records and,  in

fact, had handwritten PCB records on a yellow notepad that was sitting

on one of the barrels in the tin shed at the  time  of the inspection.

     Respondent introduced into evidence Cotter Ex.  19  which purports to

indicate some of the information (records) contained on the yellow notepad

previously mentioned.  It also sets forth additional record information.

Mr. Allen stated that a part of the first two pages  of  Cotter Ex.  19  was

the information contained on the yellow notepad.   However, Mr. Allen

testified that "They were made in my own handwriting, but I am not sure

if it was prior to the inspection or not." Tr. 482.

     It must be concluded that Respondent had not  developed and maintained

records on the disposition of PCBs and PCB items  as  required by Section

761.45(a).

                 Appropriateness of the Proposed Penalty

     Section 16(a)(2)(B) of the act (15 U.S.C.  2615(a)(2)(B) provides that

in determining the amount of a civil penalty  "the  Administrator shall take

into account the nature, circumstances, extent, and  gravity of the.  . .

violations and, with respect to the violator,  ability to pay,  effect  on

ability to continue to do business, any history of prior such  violations,

the degree of culpability, and such other matters  as justice may require."

Section 22.27(b) of the Rules of Practice (45 F.R. 24360), the rules  of

practice applicable herein,  provides as follows:

        (b) Amount of civil  penalty.  The presiding  officer shall
     determine the dollar amount of the recommended  civil  penalty
     to be assessed in the initial  decision in  accordance with any
     criteria set forth in the act relating to the proper amount

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                                  - 44 -





Good Faith



     It does appear that an effort was made by Respondent during the month



between the time Mr. Lynham of MSHA made his inspection and the date of



the EPA inspection.  The 0 and A Document was received prior to the EPA



inspection.  Pursuant to information contained therein, Mr. Allen ordered



PCB labels, DOT_approved 55 gallon drums and 85 gallon barrels.  He had



placed certain capacitors in PCB labelled drums, which had arrived in



August 1980, and placed the drums in the tin shed.   By the time of the



EPA inspection, Mr. Allen had started labelling other equipment,  even



though some of the labelling might not have been in accordance with the



PCB regulations.



     Complainant adjusted the proposed penalty upwards by 15% because of



the violator's attitude concerning the PCB rules.  In evaluating  the attitude



of an alleged violator, the Civil Penalty Policy requires that the prompt-



ness of corrective actions be taken into account in proposing a penalty.



Mr. Blackwell,  the EPA employee who calculated the  proposed penalty,



admitted that he disregarded this factor by not attempting to discover



the corrective actions taken.  The record is silent as to any objective



evidence such as statements or actions in support of any  alleged  "bad



attitude" on the part  of Respondent.   For the reasons set forth,  the  overall



proposed penalty for each count found to be in violation  totalling $69,000.00



is hereby reduced by 15% to a penalty of $58,650.00.



     Since $37,950.00  has been eliminated from the  proposed penalty based



upon a  finding of no violation or,  in the case of Counts  II  and IV,  by



stipulation of the parties and an additional  15% or $10,350.00 has been

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                                  - 43 -
     of a civil penalty, and must consider any civil  penalty guide-
     lines published under the act.  The presiding officer may
     increase or decrease the assessed penalty from the amount
     proposed to be assessed in the complaint.

     The penalties proposed herein and the resultant  findings are as

follows:
                                      Violation
     Substation 2300                  Found                  Dismissed
     Count I — Marking               $11,500.00
     Count X — Disposal                                     $ 5,750.00

     Red drum
     Count III — Marking               1,725.00
     Count VII -- Storage               1,725.00

     Substation 800
     Count VI — Marking                                       1,725.00
     Count IX — Storage                                       1,725.00

     Substation 4160
     Count II — Marking                                      11,500.00*
     Count XI -- Disposal                                      5,750.00

     Bone Yard
     Count V — Marking                 1,725.00
     Count VIII -- Storage              1,725.00
     Count XII — Disposal             19,550.00

     Area Behind Compressor Shed
     Count XIII — Disposal19,550.00

     Line Material Company Transformers
     Count IV — Marking                                      11,500.00*

     Recordkeeping
     Count XIV                         11,500.00             	
                                      $69,000.00              $37,950.00


     Respondent has suggested that its general  good  faith  efforts  to comply

and its credit for expenditures for PCB compliance should  mitigate any penalty

which might be assessed for violations found  to exist.   In addition, Respondent

contends the actual calculation of the penalty  by Complainant is  in error since

the Guidelines (45 F.R. 59770) were not followed.
* Dismissed by stipulation.

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                                  - 45 -


eliminated by readjusting the penalty pursuant to the  "bad attitude"

allegation, I find that the total'penalty proposed, $106,950.00 should

be reduced to $58,650.00

     All contentions of the parties presented for the  record have been

considered and whether or not specifically mentioned herein, any suggestions,

requests, etc., inconsistent with this Initial Decision are denied.



                                ORDER*

     Pursuant to Section 16(a) of the Toxic Substances Control  Act (15 U.S.C.

2615(a)), a civil penalty of $58,650.00 is hereby assessed against the

Respondent Cotter Corporation, Schwartzwalder Uranium Mine for  the violations

of the act found herein.

     Payment of the full amount of the civil penalty assessed shall be made

within sixty (60) days of the service of the final  order upon Respondent by

forwarding to the Regional  Hearing Clerk a cashier's check or certified

check payable to the United States of America.
                                                  EdWafd B;  Finch
                                          Chief Administrative Law Judge
Datedr
*  Unless an appeal  is  taken pursuant  to Section  22.30  of  the  rules  of
   practice or the Administrator elects  to review this  decision  on his
   own motion, the Initial  Decision  shall  become  the  final  order of  the
   Administrator.   (See Section  22.27(c)).

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                            CERTIFICATION





                                                                      "•„

     I hereby certify that a copy of this  Initial Decision  was mailed to   \
                                                                         •*.

the Regional Hearing Clerk, U. S. EPA, Region IX, by certified mail, return


receipt requested, and the original  of this  Initial  Decision was hand-carried


to the Hearing Clerk, EPA Headquarters, this date.
                                   _x>^_^  ^4
                                      '       Leann* B.  Brfisvert
                                       Secretary to CALJ Edward B. Finch
March  21, 1984

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3D

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                       BEFORE  THE  ADMINISTRATOR
                U.S.  ENVIRONMENTAL PROTECTION  AGENCY
                          WASHINGTON,  D.C.
 In the  Matter  of:                 )
                                  )
 Robert  Ross  &  Sons,  Inc.          )       TSCA  Appeal No.  82-4

   Respondent                      )

 TSCA Docket  No. V-C-008           )
                           FINAL DECISION

     Complainant, Director of the Enforcement  Division, EPA,

Region V, appeals from an Initial Decision of  Administrative Law

Judge Spencer T. Nissen dismissing charges brought against Respond-

ent, Robert Ross & Sons, Inc., under the authority of §16(a) of the

Toxic Substances Control Act (TSCA), 15 U.S.C. §2615(a).  Respond-

ent, although agreeing with the result reached in the Initial Deci-

sion, filed a protective appeal, contending that certain findings

of fact and conclusions^of law in the Initial  Decision are in error.

     Complainant instituted this proceeding by a complaint issued

on March 31, 1980, alleging violations of regulations issued under
               I/
§6(e) of TSCA.    The regulations in question govern the disposal,
I/ TSCA §16(a)(l) provides as follows:

              Civil.  (1) Any person who violates a provision
          of Section 15 shall be liable to the United States
          for a civil penalty in an amount not to exceed
          $25,000.00 for each such violation.  Each day such
          a violation continues shall, for purposes of this
          subsection, constitute a separate violation of
          Section 15.

     TSCA §15 provides,  in pertinent part, that it shall be unlawful
for any person to "(1)  fail or refuse to comply with . . .  (B) any
requirement prescribed by § . . .  6, or (C) any rule promulgated
under § ... 6."

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storage and marking of polychlorinated biphenyls (PCBs), 40  CFR
                 2/              »  .
Part 761 (1978).    These regulations partially implement  §6(e)

of TSCA which, among other things, directs the Administrator to

prescribe methods for the disposal of existing PCBs.  Complainant

alleged in the complaint that Respondent improperly disposed of
                                                   I/
PCBs by burning them in an unapproved incinerator.     Respondent

was charged with the violations as a result of two separate  in-

spections of its facilities, one on July 10,  1979,  and the other
2/ "PCBs" are defined in the regulations at 40 CFR §761.2(s) as  "any
chemical substance that is limited to the biphenyl molecule that has.
been chlorinated to varying degrees or any combination of substances
which contain such substance."  Section 761.l(b)  provides that "the
terms PCB and PCBs are used in this rule to refer to any chemical sub-
stances and combinations of substances that contain 50 ppm (on a dry
weight basis) or greater of PCBs, as defined  in §761.2(s). . . .  Any
chemical substances and combinations of substances which contain less
than 50 ppm PCBs because of any dilution, shall be- included as PCB
and PCBs [over 50 ppm PCBs] unless otherwise  specifically provided."

_3_/ The complaint actually reads in pertinent  part:

          1.  The above referenced facility of Robert Ross
          and Sons, Inc., operates an incinerator intended
          to  destroy and dispose of liquid wastes.
          4.  40 CFR §761,10(a)(3)  requires  liquids including
          but not limited to mineral oil  dielectric fluid,
          containing a PCB concentration  of greater than
          500 ppm be disposed of in compliance with Annex I,
          §761.40.

          5.  At the time  of an inspection initiated by U.S. EPA,
          Region V, of the above named facility on July 10, 1979,
          PCB laden waste oils were found in concentrations of
          4400 ppm and 760 ppm ....   (next page)

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on  November 5, 1979.  A civil  penalty  of  $35,750  was  proposed
                  I/              ,                         •     •
in  the complaint.

     A hearing was held in Chicago,  Illinois  on September  22-24,

1981.  In his Initial Decision,  the  presiding officer dismissed

the alleged disposal violation arising out  of the November inspec-
3/ continued

          6. At the time of an  inspection  initiated  by U.S.
          EPA, Region V, of the above named  facility on or
          about October 2, 1979, it was  found  that the above
          referenced PCS laden waste oils  with a concentration
          of greater than 500 ppm had been incinerated in vio-
          lation of Annex I, 40 CFR §761.40.   (Emphasis added.)

Waste oils are specifically defined in the PCB regulations as "used
products primarily derived from petroleum, which include, but are not
limited to, fuel oils, motor oils, gear  oils,  cutting oils, transmis-
sion fluids, hydraulic fluids, and dielectric  fluids."  40 CFR §761.2
(ii).  Respondent argues that the complaint  should be dismissed
because Complainant has not proven by a  preponderance of the evidence
that the wastes in issue were waste oils as  defined  in the regulations.
However, the gravamen of the violation is  that Respondent disposed of
PCBs in concentrations over 50 ppm in an unapproved manner.  Therefore,
whether the Respondent allegedly disposed  of PCBs as waste oils, liqui.d
wastes, or fuel (as the wastes are-variously referred to throughout the
transcript) is not material.  In addition, if  any error did occur
because the wastes were characterized as waste oils, it was harmless
because the true nature of the wastes was  actually litigated.   Re-
spondent alleges no undue surprise based on  any variance from the
pleadings.   Nor does Respondent proffer  any  additional evidence or
contend that its presentation would have differed had the complaint
referred to PCB laden wastes rather than PCB laden waste oils.  It is
a generally accepted principle of law that the purpose of an admini-
strative complaint is to give adequate notice  of the alleged charge
so that the charged party can prepare a  defense.  See Davis, Admini-
strative Law TreatiseT  §8.04 (1958)  and  the  rules governing this
proceeding, 40 CFR §22.14.  The complaint  sufficed to provide such
notice in this case.

4/ Two disposal violations were alleged  in the complaint.  A penalty
of $18,750  was proposed based on samples taken on July 10, 1979, from
an 80,000 gallon tank and a 17,000 gallon  tank; a penalty of $17,000
was proposed based on samples taken  from a mixing pit on November 5,
1979.

-------
 tion,  because  incineration had not been proved as  alleged  by

 Complainant.   He made no other findings regarding  that  alleged

 violation.  He also dismissed the charge based on  the July in-

 spection because the samples were not representative of  the

 materials in the containers from which they were taken.

     On appeal, Complainant only contests the dismissal  of the

 charge based on a sample (referred to as sample "SO}"),  taken

 during the July inspection, which allegedly contained 4,400  ppm
       5/
 PCBs.    In response, Respondent argues that, in addition  to

 not being a representative sample, sample SOj was not analyzed

 appropriately and the calculations from which the PCB concen-

 tration was derived were flawed;  therefore,  according to

 Respondent, the presiding officer's conclusion that sample  SO}

 contained PCBs in concentrations  of 4,400 ppm as alleged by

 Complainant was erroneous.   For the reasons  stated below,  the

 presiding officer's Initial Decision dismissing the charges

 against Respondent is affirmed.
5/ Although Complainant took two samples (referred to as "SO}" and
"SOg," respectively)  from Respondent's 80,000 gallon storage tank
on July 10, Respondent was not charged with a violation of the
disposal regulations  based on the second sample (SOs).   See n. 9,
infra.  Complainant also based the alleged  violation on a sample
taken from the 17,000 gallon tank (803)  which had a PCB concentra-
tion of 760 ppm.   See n. 3,  supra, count 1,  115.   However, the
presiding officer found that Complainant had not proven that the
waste in the 17,000 gallon tank had been incinerated.   Initial
Decision, conclusion  2.  Complainant does not appeal dismissal of
this aspect of the alleged disposal violation.

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 BACKGROUND

     Respondent  operates  a waste  disposal  facility where indus-

 trial waste  is incinerated.  The  waste  typically  includes adhe-

 sives, pigments,  solvents, resins, printing  inks  and  plasticizers.

 When the waste arrives at Respondent's  facility,  it is  added  to

 a mixing pit, which may or may  not contain waste  from previous

 deliveries;  the  waste in  the mixing pit  is then mixed;  and  after-

 wards, it is transferred  to an  80,000 gallon  tank  where it  is

 mixed again  and  eventually transferred  to a  50,000 gallon tank.

 From there it is metered  into an  incinerator  and  used as fuel.

 If the waste is  too viscous to  flow easily into the incinerator,

 a thinning agent, stored  in a 17,000 gallon  tank,  is  added  to the

 mixture before it is metered into the incinerator  and burned.

     Respondent  only accepts waste from  the original  generator  of

 the waste, who is required to submit a Waste  Product  Survey (Re-

 spondent's Ex. 3) identifying the waste  and-'its chemical  com-

 position.  Respondent relies on the Survey to identify  the con-

 tents of the waste and does not perform  any analyses  of  its own.

 If the completed Waste Product Survey shows that the  waste contains

 PCBs, the customer must identify  its concentration  and  provide

 supporting documentation for that information.  However,  Respond-

ent's service agreements state that PCBs cannot be  accepted for
          i/
disposal.
6/ This apparent inconsistency, i.e., requesting information on
PCB concentrations in the Waste Product Survey, while stipulating
in-the service agreement that PCBs will not be accepted for dis-
posal, is nowhere explained in the record.  See Tr. 417-418.

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     On July 10, 1979, an EPA inspector took samples  of  waste
                                  *
materials  from Respondent's mixing pit, 50,000 gallon tank,  80,000

gallon tank, and 17,000 gallon tank.  Only the sample (SO^)  taken
                                                         I/
from the top of the 80,000 gallon tank is at issue here.     The

inspector  took the sample from the top of the 80,000  gallon  tank,

which was  30 feet tall, by climbing a ladder and inserting an  EPA

pole sampler into the nearly full tank.  Because the  material  in

the tank was quite thick, the inspector was only able  to insert the

pole to a  depth of about four feet.   He did not take  any other
                                    I/
samples from the "top" of the tank.     Although the liquids  in the

tank could have been mixed through use of a recirculation pump, no

mixing was done before the sample was taken.

     After the inspection was completed,  Complainant  analyzed

sample SO}, using a gas chromatograph with electron- capture  (GCEC);

the results allegedly showed that the sample  contained PCBs  in

concentrations of 4,400 ppm.   Based  on this evidence and the fact

that the contents of the tank were incinerated  subsequent to the

inspection, Complainant charged  Respondent with a violation of

the PCB disposal regulations prohibiting  the  burning of high
7_/  See nn.  4 and 5, supra.

8_/  Another  sample (50%)  was taken from the "bottom" of the tank.
This sample  was taken from a five gallon bucket,  which had been filled
from a valve in a pipe near  the bottom of the tank.   The liquid in the
bucket was drawn after the tank's recirculating pump was operated for
about ten (10)  minutes.  The analysis  of this sample showed PCBs in
concentrations  of 95 ppm.  However,  Complainant did  not charge Re-
spondent with a violation of the regulations based on this sample.
See nn. 3 and 5, supra.

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                                                    I/
 concentration PCBs  in  a  non-complying  incinerator.     A penalty
                                           JLO/
 of  $18,750 was proposed  in  the complaint.

 DISCUSSION

     The PCB regulations  specify  procedures  for  PCS disposal  to

 ensure that additional amounts of PCBs are not added to the en-

 vironment.  40 CFR  §761.10.   In general,  the  regulations require

 that all PCBs in concentrations over 50 ppm be disposed of in

 an  approved manner.  Id.  Materials with  PCB  concentrations be-

 tween 50 and 500 ppm may  be disposed of in an EPA approved chem-

 ical waste landfill, in an  EPA approved incinerator,  or in an

 EPA approved high efficiency boiler.  40 CFR  §761.10(a)(2)(3)(4)

 and (5).  However, materials containing PCBs  in  concentrations

 greater than 500 ppm may  only be disposed  of  in  an  EPA  approved

 incinerator.  40 CFR §761.10(a)(1).  .Materials containing PCBs  in

 concentrations below 50 ppm, with one exception, do not  have  to

 be disposed of in compliance with the foregoing  procedures.   The

 exception applies to materials that contain less than 50 ppm  PCBs
                     ii/
 because of dilution.      In the instant case, it is undisputed
£/ Complainant charged Respondent in the complaint with burning
PCBs in concentrations of 500 ppm or greater; however, as the dis-
cussion in the text demonstrates, the relevant cutoff is actually
50 ppm.  Therefore, Complainant need only prove that PCBs in con-
centrations of at least 50 ppm were disposed of improperly.

1Q/ The proposed penalty was based on samples SO^ and 503.
See nn. 4 and 5, supra.

ll/ See n. 2, supra, which explains that chemical substances and
combinations of chemical substances containing less than 50 ppm
PCBs as a result of dilution are still considered to be PCBs for
purposes of the regulations.

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                                  8


 that Respondent's incinerator  is unapproved.  The only ques-

 tion is whether the  incinerated waste contained PCBs  in  con.-

 centrations requiring disposal in an approved incinerator.

 The answer- to this question depends on whether sample SOj  has .

 probative value because it is a "grab sample," not a represen-

 tative sample; and whether Complainant's analysis of the sam-

 ple's chemical composition was conducted in accordance with

 acceptable protocols.

   Sampling Procedures

     In the Initial Decision, the presiding officer found  that

 sample S0j, the sample upon which this appeal is based, was not

 representative of the contents of the tank from which it was

 taken,  and, because it was not representative, "Complainant had

 not shown by a preponderance of the evidence that Respondent  dis-

 posed of PCBs ...  in violation of 40 CFR §761.10(a)  as charged.1
                                       IV
 Initial Decision,  conclusions 1 and 6.      This conclusion is
12/ Because the requirements in the PCS regulations vary according
to PCB concentration, and because, for the most part, the regula-
tions do not apply to PCBs in concentrations of less than 50 ppm,
Complainant generally must prove that PCBs were found in concentra-
tions of 50 ppm or more to establish a violation of the regulations.
See n. 9, supra.

13/ The presiding officer's conclusion that representative samples
were necessary to prove disposal violations was based in part on
§761.10(g)  of the regulations.   Initial Decision at 26.  This section
provides guidance to owners or  users of "waste  oils" — defined in
§761.2(ii)  as consisting principally of petroleum derived products —
on how to sample  waste oils which have been collected in a common
container.   It allows them to combine waste oil from separate sources
in a common container or "batch" for purposes of analyzing the PCB
concentration so  long as representative samples, as described in the
regulations,  are  taken.   As to  the necessity of taking representative
samples, the  presiding officer  held that Complainant, in attempting
to establish  a violation of the law, must be held to the same
standard as owners and users.

-------
 correct  insofar as  it describes  the  evidence  needed  to  prove  the
                                                           !4/
 PCB concentration of the contents  of the  tank as  a whole.      To
                                  *
 do that  Complainant needed a  representative sample with a  PCB

 concentration in excess of 50 ppm.   Complainant's sample,  however,

 was only a  "grab sample," and, as  such, according to the presiding

 officer, represented nothing more  than the particular spot sam-

 pled.  Initial Decision, finding 27.  A representative  sample,

 in contrast, is one which, as stated  by Respondent's  expert wit-

 ness, is "small enough to bring  into  the  lab  that when  analyzed

 would give you results that would be  the  same  as  any  other sample

 that you took from that tank at that  time."   Tr.  377.   See also

 Tr. 310, 448-450.   A grab sample clearly  cannot satisfy  that  re-

 quirement; nevertheless, as explained below,  a grab  sample may

 still have probative value.

     Apparently, because the sample was not represe-ntat ive, the

 presiding officer also found that there was no evidence  that  Re-

 spondent attempted to dilute the PCB concentrations  in  its waste

 to below 50 ppm; nor was there any evidence of PCBs having been

 added to the storage tank in concentrations of 500 ppm or  greater.

 Therefore, he concluded that the provisions of the regulations

 relating to dilution were not applicable.   Initial Decision at

 27.   I disagree.   The  purpose of the provision governing dilution
14/ Complainant argues on appeal that, in any event, the sample in
question was representative of the "top" layer of the wastes in the
tank.  However, based on expert testimony presented by Respondent,
there can be no question that the sample was not representative of
the contents of the tank or even an undefined "layer." Tr.  448-450.
Because it is determined that a representative sample is not re-
quired for purposes of this case, it is unnecessary to address this
issue in greater detail.

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                                 10


is to ensure that the concentration of PCBs above the 50 ppm

cutoff is not artificially lowered so as to circumvent the .
                         •*        »

requirements for disposal by one of the approved processes

authorized in the regulations,  such as by incineration in an

EPA approved incinerator.  This "anti-dilution" policy is found
                                              IS/
in the definition of PCBs at 40 CFR §761.2(s),     which provides

that, notwithstanding the general exclusion of  PCBs below 50 ppm

from the scope of the regulation's coverage,  "[a]ny chemical sub-

stances and combinations of substances which  contain less than

50 ppm PCBs because  of any dilution,  shall  be  included as PCB and
15/ See n.  2  supra.   The anti-dilution  policy  is  also reflected
in the "batch testing"  regulations  referred  to in n.  13,  supra,
40 CFR §761.10(g)(2}, which  deal  specifically  with waste  oils:

               (2)  Owners or users  of waste  oil may use the
          following  procedures  to determine  the PCB concentra-
          tion of  waste oil:

               (i)  Waste oil  from more  than  one source may be
          collected  in  a common container, provided that  no
          other chemical substances or  mixtures,  such as  non-
          waste oils, are added to  the  container.

              (ii)  For  purposes of  complying with the marking
          and disposal  requirements, representative samples may
          be  taken  from either  the  common container or individual
          containers to determine the PCB concentration Except
          [sic]  that if any  PCBs  at a concentration of 500 ppm
          or  greater have  been added to the container then the
          total  container contents  must be. considered as  having
          a PCB concentration of  500 ppm or greater for purposes
          of  complying  with  the disposal requirements of  this
          subpart.   For purposes  of  this subparagraph, represen-
          tative samples of  waste oil are either  samples  taken
          in  accordance with American Society  of  Testing  and
          Materials  D-923  method  or  samples taken  from a  contain-
         er  that has been thoroughly mixed in a manner such  that
          any PCBs  in the  container  are uniformly  distributed
          throughout the  liquid in  the container.    (Emphasis  added. )
          (next  page)

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                                 11
PCBs [over 50 ppm PCBs]  .  . .  ."

     In the present case,  the inspector obtained a grab sample

— sample SO^ --..which allegedly, had a PCB concentration of
   /
4,400 ppm.  Although this  grab sample cannot be regarded as

representative of the contents of the tank as a whole, it seems

inescapable that the sample, if properly .analyzed,, is circum-
15/ continued

The preamble to the batch testing regulation, 40 CFR §761.10(g),
explains:

          E. Batch Testing of Mineral Oil Dielectric Fluid

               Testing  of mineral oil dielectric fluid and
          waste oil from sources that are otherwise assumed
          to contain PCBs at a concentration between 50 ppm
          and 500  ppm can be performed on samples taken from
          collection tanks ("batch testing").  This is per-
          mitted so that oils from multiple sources can be
          collected and tested without requiring a separate
          test of  each  transformer each time a disposer wants
          to evaluate his disposal options.

               The prohibition against dilution, however,  has
          not changed.   The new testing option does not permit
          the deliberate dilution Of the collected oil (assumed
          to contain PCBs above 50 ppm) with PCB-free  or low PCB
          fluids to reduce the concentration of PCBs in the re-
          sultant  mixture below 50 ppm.  Further,  the  option does
          not permit the deliberate addition of PCB wastes with
          concentrations greater than 500 ppm to the tank  in order
          to avoid the  more stringent disposal requirements foF
          high-concentration wastes.   If such high-concentration
          wastes are added to the tank, then the entire tank con-
          tents  must be  disposed of in compliance  with require"-
          ments  for wastes containing 500 ppm PCBs or  greater,
          even  if  a sample of the aggregate tank contents  reveals
          a  concentration below 500 ppm.fnthis  circumstance,
          the tank contents cannot be used as dielectric fluid;
          the tank contents must be disposed of in a high  tem-
          perature incinerator.   (Emphasis added.)  (44 Fed.  Reg.
          31514, 31520-21,  May 31,  1979).

-------
                                 12
stantial evidence that PCBs were added to the tank  in conce.n-
                                  v
trations at least as high as those found in the sample,  if  not
        16/
higher.   '.Therefore, regardless of the actual PCB concentra-

tion level of the tank when its contents were incinerated,  a

presumption is raised, by the anti-dilution provisions,  that

the contents of the tank contained PCBs at a level  of concen-
                                                      il/
tration requiring disposal in an approved incinerator.    Of

course, an argument could be made that the inspector, when  he

removed the grab sample, also removed the only PCBs from the

tank in concentrations over 50 ppm, thereby "saving" Respondent

from a disposal violation when the contents of the  tank were

subsequently incinerated; however, this argument is plainly

far-fetched.  Instead, it is more plausible to infer that after

the grab sample was taken, the tank still contained residues of

PCBs, and that those residues were, in fact,  disposed of in
16/ Respondent argues in its appellate brief that the high concen-
trations of PCBs found in SO± may have been due to aggregation of
materials with low concentrations (below 50 ppm)  of PCBs, i.e., the
paint pigments.   However, there is no evidence in the record to
support this "aggregation" theory.  Therefore, Respondent's argument,
based as it is on mere speculation,  must be rejected, and cannot, by
itself, overcome the presumption that arises from finding PCBs in
concentrations of 4,400 ppm in the tank.

17/ However, as explained in the text, under the  heading "Sample
Analysis,"  Complainant has failed to prove  that the sample did in
fact contain PCBs in concentrations  of 4,400 ppm, and, therefore,
the disposal charge has been dismissed.

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                                  13
                                     IB/
 Respondent's unapproved  incinerator.     In  any event,  the

 presumption that  arises  from  finding  the high concentration

 PCBs  in  the tank,  if unrebutted", makes  it unnecessary  to

 delve  further  into these arguably  speculative concerns.   The

 presumption alone  is a sufficient  basis for establishing a

 violation.

     While the preceding discussion demonstrates  that  Complain-

 ant's  failure  to obtain  a representative  sample is  not necessar-
                                            19/
 ily fatal to proving a disposal violation,      the  analysis  of

 the PCB concentration in the grab  sample  obviously  must  be

 properly conducted  to prove the violation.   As explained  below,

 the results of Complainant's analysis are not  reliable,  and  the

 disposal charge in  the complaint is, therefore, dismissed.

   Sample Analysis

     Sample SO^ was analyzed by gas chromatography  with  electron

 capture (GCEC).  Because the sample was classified  as  an  oil

 sample, the applicable protocol required  that  it  first be

 examined for the presence of suspended matter.  Tr. 133.   A

 portion of the sample was then weighed and dissolved in hexane.
18/ Nothing in this final decision should be read as condoning the
sampling techniques employed by the Complainant.  It is clear from
the record that the inspector had no clear cut sampling plan before
arriving at Respondent's facility; that if a representative sample
had been necessary, it is unlikely that one would have been obtained;
and that the inspector handled the materials in a negligent manner,
e^.g. ,  by throwing a glass bottle used to obtain the sample to the-
ground from a height of 30 feet, so that it broke.  Tr. 21-23.

19/ Nevertheless, sound enforcement procedures dictate that repre-
sentative samples be obtained whenever feasible.

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                                 14
 PCBs were then eluted from the sample,  and by  use of  an  evapor-



 ator,  the extract was concentrated, and  injected  into  the ga's



 chromatograph, which separates the various components of the



 sample, producing a strip chart recording or "chromatogram."



 The analyst determines if additional cleanup of  the sample  is



 needed after examining the chromatogram.  Identification of



 PCBs in the sample is made by comparing the chromatogram of the



 sample with "standard" chromatograms for known PCBs.  The con-



 centration of PCBs in the sample is determined by use of a



 formula comparing the standard and sample.  Based on  these  pro-



 cedures, the presiding officer found that the  "reported  PCB



 concentrations, to wit: 4,400 ppm for sample SO^ . .  . are



 accurate."  Initial Decision, conclusion 2,  and subsidiary  find-



 ings of fact,  6 and 16.  On appeal, Respondent advances  several



 reasons in support of its contention that the results of  Complain-



 ant's analysis of sample SO}  should not be accorded any  eviden-



 tiary weight;  however, for brevity's sake, the discussion below



 is limited to the one reason  with which I am in full agreement.



     Respondent contends that sample SO} should not be accorded



 any evidentiary weight because Complainant's calculation of the



 PCB concentration is so poorly documented that the results, i.e.,



 PCBs in concentrations of 4,400 ppm,  are not credible.  Accord-



 ing to Respondent,  Complainant's computer printout shows that



 the PCB concentration of sample SO} is  actually 4,400  parts per



billion;  therefore,  the  PCB concentration, when measured in

-------
                                  15
parts per million, is really equivalent  to  4.4  ppm,  well
                                                           •

below the regulatory limit of 50 ppm.  See  Tr.  330-332.   In


response, Complainant asserts that the computer printout  for


sample SO} does not reflect the final calculation  because the


analyst must have revised the results by hand to take  into


account the so-called "dilution factor," i.e.,  the factor that


makes allowances for any solvents added  to  the  original sample.


The presiding officer upheld the Complainant, stating  that "the


tests for [sample] SO} . . . have not been  shown to  have  been

improperly conducted or calculated."  Initial Decision at 26.


     On appeal, Respondent argues that the  presiding officer


misallocated the burden of proof.  I disagree.  Nevertheless, I


am convinced that Complainant did not prove that the concentra-


tion of sample SO} exceeded 50 ppm.  Complainant is  required by


§22.24 of the consolidated rules to prove a violation by  a pre-


ponderance of the evidence.   40 CFR Part 22 (1980);  see also


SEC v. Steadman, 450 U.S.  91,  101 S.Ct.  999, 67 L.Ed.2d 69 (1981),


Complainant also has the burden of going forward with the evi-

dence to establish a prima facie case.  Id.   In this specific


instance, Complainant presented evidence in the form of an ex-


hibit (Complainant's .Ex.  10, Table 1) which purports to show that


the PCB concentration of SO} is 4,400 parts per million;  however,


as Respondent correctly points out,  the  computer printout reports


the concentration as  4,400 per bill ion,  an amount  which is equiva-


lent to only 4.4 ppm.   Complainant attempted to explain the dis-

-------
                                  16
 crepancy by presenting testimony to the effect that the com-



 puter  — which is used to perform analyses on numerous samples



 -"-  is  not necessarily•reset or'changed between samples; and,



 as  a consequence, it  is sometimes necessary for the analyst to



 revise the results by hand to reflect the fact that, for a



 particular sample, such as sample SOj, the computer may still



 be  using a dilution factor employed in a previous sample.



 Tr. 233.  According to Complainant, the analyst, who is in a



 position to know whether the computer has been reset, will, if



 necessary, revise the results to take the correct dilution



 factor into account.   Thus,  in this manner,  Complainant at-



 tempts to justify its contention that sample SO± contained PCBs



 in  a concentration of 4,400  ppm, rather than 4.4 ppm.



     Although Complainant's  explanation may  be plausible,  it is



 not supported by any  solid evidence;  instead,  it is based on



 speculation" and,  therefore,  is not  sufficient  for purposes of



 sustaining Complainant's  burden of  proof.  The analyst  who sup-



 posedly knew whether  the  computer results had  to be adjusted for



 the dilution factor was  not  presented as a witness for  Complain-



 ant; nor was Complainant's account  of what happened ever support-



ed by any documentation,  despite the  fact  that the Director of



the EPA laboratory where  the  analysis was  performed testified



that documentation was essential to good laboratory procedure



and, in addition,  he  agreed  that "you must document in  some



fashion the  manner at  which you  arrived  in [sic]  the final

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                                  17
 dilution  on  that  sample."  Tr.  119.  This  documentation,  if
                                                           •
 it  ever existed,  was  never put  in  the  record  of  the  proceeding,

 even  though  Respondent requested that  "someone who knows  the-	--

 file  calculate how  they  arrived at  the parts  per million  of

 PCBs  for  sample SO^.  . . ."  Tr. 200.  Complainant,  in  response

 to  this request,  did  give" Respondent additional  information

 after  the hearing was over; however, the exact nature of  that
                                           20/"
 information  does  not  appear in the  record.     Its absence

 cannot be ignored.  The  logical inference  to draw from  Complain-

 ant's  failure to  document the dilution factor is that there is

 no  such documentation; as Complainant's own witness  agreed,

 some  type of documentation is needed to comply with  good  labora-

 tory  procedures.  Therefore, even if the analyst who performed

 the analysis of sample SOj had testified at the hearing,  the

 lack of documentation would still be a matter of serious  concern.

 Complainant's case rests on the contention that sample -SO^ con-

 tained PCBs  in concentrations of 4,400 parts per million;  how-

 ever, Respondent was able to cast considerable doubt on the

 validity of this contention by showing, through cross-examination

 of Complainant's witnesses, that the only solid evidence  in the

 record indicates that the concentration of the sample was  only

 4,400 parts per billion,  i.e., an amount equivalent to 4.4 ppm.
20/ The parties filed post-hearing affidavits in an attempt to
further bolster their respective positions; however, these affi-
davits neither mention the dilution factor nor include the infor-
mation requested by Respondent.

-------
                                18

         k
The burden of proof therefore shifted back to Complainant  to

provide evidence, not merely supposition or argument, of how

the so-called dilution factor.Was used in the laboratory pro-

cedures followed by Complainant's analyst.  This evidence,

whether in documentary form or otherwise, was not forthcoming;

therefore, it must be concluded that Complainant has not met

its burden of proving, by a preponderance of the evidence,

that the PCB concentration of sample SOj exceeded 50 ppm.

CONCLUSION

     For the reasons stated, the presiding officer's Initial

Decision dismissing the charges against Respondent is affirmed.

All findings of fact and conclusions of law consistent with this

decision are incorporated in this final decision.  Complainant's

"grab" sample, even though it was not a representative sample,

does have probative value; however,  in this case, Complainant's

analysis of the sample_failed to establish that it contained

concentrations of PCBs of at least 50 ppm.   Therefore,  Complain-

ant did not prove by a preponderance of the evidence that Re-

spondent disposed of PCBs in concentrations over 50  ppm in

violation of the regulations.   Accordingly,  the charges against

Respondent are dismissed.

     So ordered.
                                  Ronald  L.  McCallum
                               Judicial Officer (A-101)
Dated:   APR 4  1934

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                      CERTIFICATE OF SERVICE
     I hereby certify that copies of the  foregoing  Final  Decision
In the Matter of Robert Ross and Sons,  Inc., TSCA Appeal  No.  82-4,
were sent to the following persons, irv  the manner indicated:
By 1st Class Mail,
postage prepaid:-
By hand delivery:
Eric Dunham,  Esq.
Michael Walker, Esq.
Office of Regional  Counsel
EPA, Region V
230 South Dearborn  St.
Chicago, IL 60604

Richard D. Panza, Esq.
Wickens, Herzer & Panza Co.,
1144 West Erie
Lorain, OH 44052
                                                              L.P.A.
                                Robert Ross
                                Gary Ross
                                Robert Ross & Sons
                                394 Giles Road
                                Grafton, OH 44104
                   Inc.
Mary Langer
Regional Hearing Clerk
EPA, Region V
230 South Dearborn St.
Chicago, IL-60604

Hon. Spencer T. Nissen
Administrative Law Judge (A-110)
EPA Headquarters
401 M St., S.W.
Washington, DC 20460
Dated:   APR 4  1984
                                M. Gail Wingo
                                Secretary to the
                                  Officer.
                 Judicial

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31

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         UNITED STATES ENVIRONMENTAL  PROTECTION  AGENCY
                    BEFORE THE ADMINISTRATOR
IN THE MATTER OF                )  Docket  No. TSCA  VII-83-T-121

KANSAS CITY STAR COMPANY,       )       .                 *f~      ^"^
                                )                         ^   v----..-•-
                   Respondent)                          -^.
1.  Toxic Substances Control Act  ("TSCA" or  "the Act")  -  Records',->-\
                                                           7*.    %*$
which Respondent was required to  keep of, and  subsequent  toj'a
                                                            fj\
visual inspection, were "required records",  having  public  aspects,

required by law to be kept to provide suitable  information of

transactions and conditions which are the appropriate subject of

government regulations.

2.  TSCA - The proper designation by the regula-tory agency of

certain records to be kept necessarily implies  an obligation to

produce them and Respondent impliedly consented to  keep and produce
                                                        r
subject records as a condition of its being  able to use polychlori-

nated biphenols ("PCBs"),  the regulatory activity involved.

Therefore, Respondent did  not possess the right to  be advised that

it could refuse to permit  said inspection and to produce  records.

3.  TSCA -  The Act provides, 15 USC 2614(4), that  it is  and was

unlawful  to refuse to permit subject inspection as  required by
                                                        i
15 USC 2610, and where the EPA inspector produced his credentials

and gave Respondent actual as well as written notice of the

character and  extent of the inspection madie, Respondent's  rights

were not violated by said  inspection nor by  the Agency's  request

for records Respondent was required to keep.

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                             -2-

4.  TSCA^ - The Act contemplates that inspection of Respondent's

premises should be made where the Agency  either has suspicions
                                                         •
that a violation is occurring or seeks assurance that pertinent

regulations  are not being violated.

5.  TSCA - Remedial legislation is broadly construed and liberally

interpreted  to effectuate its purposes and should here be strictly

enforced to  protect public health and the environment.

6.  TSCA - The nature, circumstances, extent and gravity of a viola-

tion of the  Act are considered irt determining the amount appropriately
  -•'•.—.  «L.
to be assessed as a gravity-based civil  penalty "(GBP"). Other fac-

tors, including the violator's culpability and history of compliance,

may be considered to determine if the amount of the gravity-based

penalty should be raised or lowered.

Appearances

For Respondent:

               Michael T. White, Attorney
               G. Edwin Proctorv Jr., Attorney
               Paul E. Vardeman, Attorney                -
               Polsinelli, White & Vardeman, P.C.       f
               4705 Central
               Kansas  City, Missouri 64112
For Complai nant:
               Henry  F.  Rompage,  Attorney
               Office of Regional  Counsel
               U.S.  Environmental  Protection  Agency
               Region VII
               324 East  llth  Street
               Kansas City,  Missouri  64106

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                             -3-

                       INITIAL DECI--SION

     On September 15, 1983, Complainant (hereinafter "EPA" or

"the Agency")  filed subject Complaint, which was served on the

registered agent of Respondent, Kansas City Star Company (herein-

after "Respondent") on September 20, 1983, charging Respondent

with violation of 761.30(a) I/ in that an inspection by an EPA

employee on July 19, 1983, revealed that three PCB transformers 2/

"had not been  inspected" by Respondent prior to September 24, 1982,

" .  . . or following September 24, 1982" (and thus no records were

developed maintaining information by said regulation required),

which renders  Respondent in violation of the Toxic Substances

Control Act ('hereinafter "TSCA" or the "Act" ), Section 15(1),

15-USCA §2614(1).  For said violation, Complainant proposes that

a civil penalty be assessed in the amount of $17,000 pursuant to

Section 16(a)  of TSCA, 15 USCA §2615(a).  Said .Complaint further

charges Respondent with violation of 40 CFR 761.180(a), which

required and now requires' Respondent, beginning July 2, 1978, to
                                                        r
develop and maintain records on the disposition of PCBs and PCB

items (as defined 40 CFR 761.3(x)) and to prepare an annual document

each July 1, covering the previous calendar year, which must include

information specified at said Section 761.180(a), subsections (1)

through (3).,  It is proposed that an additional civil penalty be

assessed in the amount of $8500 for Respondent's failures to comply

with said regulation as in said Complaint set forth.
I/  Said section, effective September 24, 1982 (47 FR 37342
    et seq. ,  August 25, 1982), includes th'e'provisions of a
    rule-related Court Order and enforcement notice published on
    March 10, 1981 (46 FR 16089-95), which provisions have been
    in effect s.ince May 11, 1981.

£/  40 CFR 761.3(y) defines "PCB transformer" as any transformer
    that contains 500 parts per million (ppm) PCB or greater.

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                             -4-


     In jts Answer,  .filed September 27,  1983,  Respondent .denied


the allegations  that said P-CB  transformers  had not  been inspected
                                                         •

in accordance with said regulations;  and,  in  its  First Amended


Answer, filed on or  about March 23, 1984,  Respondent denies the


allegation that  it failed to develop  records  on the disposition


of PCBs and PCB  items;  and it.  further denies  that it failed to


prepare_annual  documents  for the calendar  years 1978,  1979, 1980


and 1981.


     A prehearing conference was held on January  26, 1984,  and


the parties agreed to continue to negotiate  in an effort to


arrive at  a settlement  of outstanding issues  which  included the


amount of  the civil  penalties  proposed to  be  assessed.


     An adjudicatory hearing was held in the  Federal Courthouse,


811 Grand  Avenue, Kansas  City, Missouri, in  Court Room 7 (Room 401)


on Thursday,  March 29,  1984.  The parties  have -filed herein their


proposed findings of fact, conclusions of  law, briefs  and arguments.


     On the basis of the  entire record,  including said submissions
                                                        r
by the parties,  I have  arrived at. the following


Findings of Fact


1.  Respondent,  --Kansas  City  Star Company,  is  a corporation  engaged


in the business  of newspaper publishing, with  two daily editions


being published  Monday  through Friday and  one  edition  being


published  on  each Saturday and Sunday.  Said  company's publica-


tions require its operation  24 hours  a day,  seven days a week.


2.  In order  to  operate said business, as  aforesaid, Respondent


maintains  a series of electrical  transformers  to  power its  print-


ing presses,  machinery  and equipment.


3.  On July 19,  1983, EPA Inspector (Consumer  Safety Officer)  Morris


conducted  an  inspection of Respondent's  premises,  including its

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                             -5-


electrical  transformers.  Three of-seven transformers inspected


were found  to be PCB transformers (Transcript ["Tr."] 4).
                                                         •

4.  Inspector Morn's presented his credentials to Charles Rothganger,


agent in charge of Respondent's premises at or during said  inspec-


tion, and gave him written notice of said inspection (Exhibit ["Ex."]


Complainant ["C"]-l, Tr. 15; ,15 USC §2610).


5.  Subject three PCB transformers were located on Respondent's


premises, one at the S substation and two at AC-3 air conditioning


room (Tr. 20).  Inspector Morris was told by Respondent's employee


that said transformers were PCB transformers and the nameplates


on said  transformers further confirmed they were PCB transformers,


as one contained Pyranol and the other two Askarel (Tr.  13;


Ex.  C-l).


6.  Inspector Morris did not see employees or electricians  work-


ing  near or around subject transformers (Tr. 2L).


7.  Though  Inspector Morris' notice of inspection was sufficiently


extensive to include an inspection for "Sale of waste oils"or
                                                       •

PCB  contaminated equipment," no such sales were found or noted


and, therefore, no violations  of this character were alleged  in


subject  Complaint (Tr. 23, 25).


8.  The  PCB transformer in substation S contained 756 gallons


of oil  and  its capacity was 1500 KVA.  No leaks or evidence of


prior leaks we re observed by Inspector Morris (Tr. 32-33).
                                                        i

9.  The  two PCB transformers in AC-3 (air conditioning  room)  had


capacities  of 1000 KVA and 1650 KVA (Tr. 34).  No leaks  or  evi-


dence of prior leaks were found (Tr. 35).

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                             -6-

10. ThoiKjh Respondent had tests for acidity  performed periodically

on all its transformers (Ex.  Respondent  ["R"]-l;  Tr. 118), it did
                                                         •
not, prior to said inspection of July  19,  1983,  perform quarterly

inspections on said PCB transformers  and  maintain a record con-

cerning any such inspections, in conformity  with  40 CFR 761.30,

nor did Respondent develop records, beginning in  1978, nor prepare
                            v ₯
annual documents on July 1 for the years  1978,  1979, 1980, or

1981,  as required by 40 CFR 761.180(a)  (Ex.  C-l;  Tr. 46-47).

11. On this' record, there was an instance,  in 1981, when one of

the PCB transformers developed a leak  (moist  and  dripping).  The

leak was promptly discovered, General  Electric  Company repairmen

were called immediately to clean up leaking  dielectric fluid and

then promptly repair the leak.  This  was  the  only instance, in

over 16 years, that witness Rothganger  could  recall that Respond-

ent has experienced a leak from its said  equipment (Tr. 71-72).

12. Though inspections  were not made  in  conformity with pertinent

regulations,  and observations then made  were  not  properly recorded,
                                                       r
visual observations of  the said PCB transformers  were made on a

daily  basis by various  personnel from  among  13  electricians, seven

engineers  and 16 machinists employed  full-time  by Respondent who,

along  with 112 other employees, has the  responsibility of the

maintenance for building services  and  equipment which includes 45

press  units and nine total presses (Tr.  61-62).

13. Since  said inspection in  July, 1983,  Respondent has retained

the services  of PPM, Inc. in  order to  achieve compliance with

EPA requirements and to furnish advice  respecting safety and

fire precautions; and has rehired  Herb  Lewis, formerly employed

as Respondent's Assistant Project  Director, to  monitor compliance

with EPA regulations (Tr. 82).

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                             -7-

14. Further remedial measures instituted by Respondent, sj'nce

subject, inspection and following filing of subject Complaint,
                                                          •
include the employment of a new safety director, purchase of C02

bottles and safety clothing, construction of a containment berm

around subject transformers, installation of fire alarm and

sprinkler systems, installation of an ADT system and an in-house

Kidde System to monitor for heat and smoke build-up (Tr.  86-89),

and an on-going program to inform its employees respecting pre-

cautionary measures and regarding compliance with EPA requirements

(Tr.  93-96).

Conclusions of Law

1.  15 USC Section 2610 (Section 11) of the Act provides  that

Inspector Morris,  as the duly authorized representative of the U.S.

EPA Administrator, had authority to inspect Respondent's  premises

and its PCB transformers containing 500 ppm PCELs or great.er

(40 CFR 761.3(x)).  Failure to permit subject inspection  would have

violated  15 USC §2614(4) and would have therefore been unlawful.
                                                        f
2.  The records sought by such inspection were not protected by

either the 4th or  5th Amendment of the U.S. Constitution  from com-

pelled disclosure  for the reasons that (1) the privilege  against

self  i n c r i mi nation protects only individuals and not a corporation;

and (2) said records were "required records", i.e., records having

"public aspects"  and required by law to be kept in order  that there

may be suitable information of transactions which are the appropri-

ate subject's of government regulation; therefore, a warrantless

search was not unreasonable (In re Grand 'iTury Proceedings,

601 F.2d  162,  I.e. 168(7-10), and cases there cited; Camara v.

Municipal  Ct.. 87  S.Ct. 1727, 387 U.S. 523, I.e. 534-535(10);

Cochran v. U.S. .  (1961), 291 F.2d 633).

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                             -8-
        •t                                                 *
3.  Subject inspection was made upon the presentation by the

inspector to Respondent's agent and employee, Charles E. Rothganger,

of appropriate credentials (Ex. C-l, C-2; Tr. 15).

4.  Respondent's said employee was advised, on presentation of

said credentials, that EPA Inspector Morris "was there to do a
                            <•_
routine PCB inspection" and that Morris wanted to see Respondent's

PCB equipment, if any, and any records maintained concerning PCB

material (Tr.  15).  By said statement from Inspector Morris,

Respondent  received actual notice of the extent and purpose of

said inspection.

5.  Respondent's agent and employee, in addition to said actual

notice, received and acknowledged receipt of a copy of a

written notice of said inspection entitled "TSCA Inspection -

Summary of  Observations" (Ex.  C-2).

6.  Tests  made to determine acidity of transformer dielectric

cooling fluids,  in  an effort to"prevent "arcing",_which will

cause damage to  said transformers, did not conform to the

requirments of 40 CFR 761.30,  which requires quarterly inspec-

tion of said PCB transformers  "for leaks" and the further

requirement of said §761.30(a)(l)(iv)  and subparts thereof,

requiring  that Respondent prepare and  maintain records and
            .<
maintenance history which shall be available for inspection by

the Agency  for at least three  years after the date the subject

transformer is disposed of.

7.  Remedial legislation should be broadly^ const rued and

liberally  interpreted to effectuate its purposes, and to achieve

Congressional  intent.

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                             -9-


8.  On this record, Respondent violated 40 CFR 761.30(a).by


failing to make visual inspections and to maintain records of


inspection and maintenance history as by said section required,


and an appropriate civil  penalty should be assessed for said


violation.


9.  On this record, Respondent violated 40 CFR 761.180(a) in


failing__to develop and maintain records and to prepare annual


documents for the calendar years 1978-1981, as by said regula-


tion required, and an appropriate civil penalty should be


assessed for said violation.


Discussion


    Respondent's suggestion that the subject inspection conducted


by EPA Inspector Morris violated the provision of 15 USC §2610


which provides that "such inspection can only be made upon the


presentation of appropriate credentials of a written notice to


the owner" is hereby rejected.  Presentation of proper credentials


was made (see Finding 3,  supra) and Respondent's employee in
                                                       t

charge was then advised of the nature and extent of the inspection


to be. made.  Therefore, actual notice was given and received.


There was no objection then made, but said employee freely con-


sented to the inspection  and subsequently gave a signed statement


(Ex. C-l) concerning the  PCB transformers which were the subject


of the inspection and also signed a receipt for a "TSCA Summary


of Observations" (Ex. C-2) upon completion of said inspection


some two to three ho.urs following the inspector's arrival at


Respondent's premises.  It is clear on thi's record that the


records required to be prepared and maintained pursuant to


40 CFR 761.30 had not been so kept and maintained because no

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                             -10-

 inspecti^ns had been made by Respon-dent which conformed to that

 required by the regulations.  It must be recognized that we are
                                                         •
 here considering remedial legislation which the Courts have

 repeatedly held should be broadly construed and liberally inter-

 preted to effectuate its purposes and to achieve Congressional

 intent.  The purposes ^f subject regulations and the statute  are
                     ' •**"
 to protect the public health and the environment.  (See Tcherepin

 v. Knight. 389 US 332, 88 SCt.548 (1967); Cattlemen's Inv. Co. v.

 Fears. 343 FS 1248,  1251 (1972)).

    In re: Grand Jury Proceedings (Grand Jury), 601 F.2d 162  (1979)

 discusses, in principle, the obligation which is here applicable

 to Respondent.  Even the protection  of the 5th Amendment (applic-

 able only to individuals, I.e.  167(4-6)) does not extend to

 "required records"  - required by law to be kept in order that

 there may be suitable information of transactions which are the

 appropriate subjects of government regulation, and the enforcement

 of restrictions validly established; and the "required records
                                                       t
 doctrine" includes  records  required  by Administrative regulations

 (see Grand J u ry, I.e. 168 (11,  12)).  Said case also addresses

 the erroneous suggestion by Respondent that it had the "right to

 refuse" such inspection and should have been so advised,  apparently

 characterizing said  inspection  as an "unreasonable search" under

 the 4th Amendment of the U.S. Constitution. 3^/ Grand Jury states,

 I.e.  171 (21, 22):
2/  Any Constitutional  objection,  if such  was  intended, was
    not timely  raised  and  thus  Waived (Cantre 11  v.  City of
    Caruthersville,  DC  MO  1955),  128 FS  637,  222 F.2d 4Z«).

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                             -11-

             " .  .  . The proper de'si gnat ion by (the government)
             of certain records to be kept . . . necessarily
             implies an obligation to produce them . . . These
             obligations to keep and produce the records are in
             a sense consented to as a condition of being able
             to carry on the regulated activity involved ..."
             (Emphasis supplied.)

    The information sought by subject inspection was clearly  •

relevant to its investigative authority and such investigations
                            v t.
are justified where an agency has suspicions that a violation is

occurring or where  it seeks assurance that pertinent regulations

are not being violated - US v. Morton Salt Co., 70 SCt. 357,

338 US 632; DeMasters v. Arend, CA ORE, 313 F.2d 79, 88 (12-14).

    More importantly, 15 USC §2614(4) provides that it is unlaw-

ful for Respondent  to fail or refuse to permit . . . inspection

as requi red by §2610.

    In its  brief,  Respondent admits it failed to maintain quarterly

records as  required by 40 CFR 761.30(a) (Conclusion of Law 8,

page 12); but submits that the method and frequency of inspection

conducted by Respondent substantially complied.  The submission
                                                       r
is apparently a reference to the fact (Finding No. 12, page 6

hereof) that over  100 persons, under Mr.  Rothganger's supervision,

many of whom possess necessary expertise to perform the requi red

inspection, pass  the point where said transformers are located

and presumably would observe any leak, if such existed.  The

weakness of Respondent's position is best expressed by the old

adage that  "what  is everybody's business  is nobody's business."

The further provision at 761.30(a) (1) (iv) that "records of

inspection  and maintenance history" shall "be maintained,  and

the information required to be included in such records connotes

the practical requirements of sa'id section that Respondent assign

to some employee  the duty to perform said visual  inspection and

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                             -12-

then and  there  note  and  maintain any  findings  made.   In addition

to providing  a  systematic  means  of.protection  to  all  who frequent
                                                         •
the locations,  the  records  contemplated  and  required  are a  re-

minder to Respondent  of  its  duty with  respect  to  the  PCB 4/

equipment and a  means  by which  the  EPA can  be  assured that  pre-

ventive measures  are  being  used  at  all times  and  that incidents
                            _•?
have not  occurred,  or  are  not  likely  to  occur,  which  might

endanger  the  public  or the  environment.

    Regulatory  measures  and  remedial  legislation  must be

strictly  enforced.   Any  failure  to  apply  sanctions  where the

Act - and the regulations  promulgated  pursuant  thereto - are

violated  will  invite  violations  in  increasing  numbers. Increasing

indifference  to  regulatory  provisions  will  frustrate, if not

defeat, the  scheme  of  regulation which the  Act'contemplates

(Wickard  v.  Filburn.  317 US  111, 63 SCt.  82).  .For  this reason,

such violations  are  not  considered  trivial  but,  rather, of  a

serious nature.   The  same  reasoning applies  to  the  importance
                                                        r
of preparing  annual  documents  for  the  years  1978  through .1981.

Civil Penalty

    The statutory criteria  for  assessing  penalties  under TSCA,

Section 16(a),  are  listed  in Section  16(a)(2)(B),  15  USC

2615(a)(2) (B),  which  provides  as follows:
4Y  47 FR 37342,  I.e.  37346  (Preamble,  August  25,  1982), further
    points  out,."An  inspection  program  also  keeps  company personnel
    informed  and  alert  to  the  potential  impact  of  PCBs discharged
    from electrical  equipment."

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                             -13-

             In determining the anrount of a civil penalty,
             the Administrator shall take into account th'e
             nature, circumstances, extent, and  gravity of
             the violation or violations and, with  respect
             to the violator, ability to pay, effect on
             the ability to continue to do business, any
             history of prior such violations, the  degree
             of culpability, and such other matters as
             just ice may require.

    To provide guidance to the assessment of penalties under

Section 16, the EPA enforcement staff has issued guidelines

setting forth the general policies it will follow and has sup-

plemented these guidelines with a specific policy for assessing

penalties for violations relating to polychlorinated biphenols

("PCBs")  and other toxic substances. ^/

    The procedural  rules for these proceedings require that I

consider  the guidelines and PCB penalty policy in determining

the appropriate penalty, and that if I assess a penalty differ-

ent in amount from that proposed in the Complaint,  I must give

my reasons therefore.  _6/

    The PCB penalty policy uses a matrix to establish an initial
                                                        r
penalty based upon  the nature, extent, circumstances and gravity

of the violation.  The initial penalty can then be  adjusted

upwards or downwards depending upon consideration of the other

statutory factors,  i.e., culpability, history of such violations,

ability to pay, ability to continue in business and such other

matters as justice  may require. 7/
.5/  See 45 fR 59770-59783 (September 10, 1980) referred to as
    the PCB Penalty "Policy,  providing Internal Procedural  Guide
    lines.  They are not regulations (I.e.' 59770, col. 1).

I/  4D CFR 22.27(b).

]_/  45 Federal  Register 59777 (September 10, 1980).

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                             -14-

    The ^regulations violated by Re-spondent  are both characterized

by the Agency (45 FR 59771,  col.  3;  September 10,  1980), as

"control-associated data gathering requirements"  which enable

the Agency to evaluate the effectiveness  of the regulation, and

to monitor compliance.  As indicated on  the matrix, three other

factors other than "nature", relating to  the violation, must be

determined,  namely, circumstances, extent and gravity.  These

four factors  yield a Gravity Based Penalty  (GBP)  to which adjust-

ment factors  can  be applied  where appropriate.  The quantity of

dielectric fluid  - 1500 to 2000 gallons  (Findings  8 and 9) - is

the principal  basis for determining  "extent" of potential harm

as "major." JJ/   "Circumstances" is used  to  reflect  on  the

probability  of  the assigned  level  of extent of harm actually

occurring.  The principal  circumstance to be here  considered is

the^effect of each of subject violations  on the. EPA's  ability to

implement  or  enforce the Act.  I  find, in this record, that the
                               x
761.30 violation  should be considered Medium range  and the
                                                       r
761.180 violation is in a  Low range  on the  matrix.
                                 s
    By determining the above factors (nature,  extent and circum-

stances),  we  have determined the  overall  seriousness (or gravity)

of the violations.  On this  record,  I find  that  a  consideration

of culpability  and history are mitigating factors  that warrant

a  downward adjustment of the GBP  otherwise  called  for  under the

guidelines.   Respondent's  action  to  avoid "arcing"  resulted in
    See  discussion  45  FR  59772,  col.  2.   The  theory  is  that
    violators  should be penalized  for  their violative  conduct;
    and  the  "good"  or  "bad"  luck of whether the  proscribed
    conduct  actua1ly caused  harm should not be an  overriding
    factor.   Because of the  quantity  of PCBs  here  involved,
    the  "extent"  of potential^  damage  will  be  considered  "major."

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                             -15-

the procurement of professional testing for acidity - the efficient

cause of such hazard.. Historically, Respondent's concern has been

directed to avoiding damage to the transformers, but such concern

would, of necessity, involve visual inspection to some extent with

some regularity.   Such extent and regularity are only approximated

in this record and such inspections would obviously not conform to

regulatory standards.   As to the record keeping (concerning only

the tests for acidity), it is not at all helpful to EPA's responsi-

bility to "implement or enforce the Act", i.e., to "evaluate the

effectiveness" of the  pertinent regulations, and to monitor com-

pliance.  As  pointed out hereinabove,  EPA's failure to strictly

enforce the regulations will invite increasing violations of

this character which could eventually  frustrate - even defeat -

the scheme of regulation critically important to maintain the

measure of control of  PCBs needed for  protection of the public

and the environment.  Historically, on this record, Respondent

has, in over  16 years, experienced but one "leak", which was
                                                       f
repaired and  cleaned up expeditiously  by General Electric Co.

(see Finding  11,  supra). Respondent's  handling of this incident

indicates an  understanding of the hazard involved and its general

concern for safety.   Remedial measures taken by Respondent since

subject inspection,  and which are recounted in part hereinabove

(Findings 13  and  14),  are commendable  and should and will be

considered.

    Turning to the second violation (of 40 CFR 761.180),  it  is

clear that Respondent  did not develop  and "maintain records on

the disposition of PCBs and PCB items  and (from such data) pre-

pare annual  documents.  This violation continued for four years.

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                             -16-

    In tjie premises, I find that an appropriate GBP to be assessed

for the violation of Section 761.30 is $10,000 and that, because

of findings hereinabove set forth, an adjustment of 20% is

warranted and I therefore find the assessment of $8,000 appropri-

ate.  I further find that a GBP of $3,500 should appropriately be

assessed for the said violation of Section 761.180.  On the basis

of the findings hereinabove, including the institution by Respondent

of remedial measures which will be adhered to in the future, I find

that said amount should be adjusted to $2,800.

                            ORDER B_/

    Pursuant to Section 16(a)  of the Toxic Substances Control

Act (15 USC 2615(a)), a civil  penalty in  the total sum of

$10,800 is hereby assessed against Respondent, Kansas City Star

Company,  for the violations of the Act found herein.

    Payment of the full amount of the civil  penalty shall  be

made within 60 days of the Service of the Final Order upon

Respondent by forwarding to the Regional  Hearing Clerk, U.S.
                                                       t
EPA, Region VII, a cashier's check or certified check payable

to the Treasurer, United States of America.


DATE:  June 19.  1984

                                    Marvin E.  Jones
                                    Administrative Law Judge
2/  Unless  an  appeal  is  taken  pursuant  to the  Rules  of Practice,
    40 CFR  22.30,  or  the  Administrator  elects'to  review the
    Decision  on  his  own  Motion,  this  Initial Decision  shall
    become  the  Final.Order  of  the  Administrator  (40  CFR 22.27(c)).

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                     CERTIFICATION.. OF SERVICE
          I  hereby certify that, in accordance with 40 CFR 22.27(a),
I have this  date forwarded to. the Regional Hearing Clerk of Region  VII,
U.S.  Envi ronnental Protection Agency, the Original of the foregoing
Initial  Decision of Marvin E. Jones, Administrative Law Judge,  and
have  referred  said Regional Bearing Clerk to said section which
f urther~~provides that,  after  preparing and forwarding a copy of
Initial  Decision to all  parties, she shall fo'rward the Original,
along with  the record of the  proceeding, to the Hearing Clerk,
EPA Headquarters ,  Washington, D.C., who shall  forward a copy of
said  Initial  Decision to the  Administrator.
DATED:  June  19.  1984
                                          v-'
*JjJ~tat
                               Mary Lou Cl i fton
                               Secretary to  Marvin E.  Jones,  ADLJ

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32

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33

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                UNITED STATES ENVIRONMENTAL PPDTECTION AGENCY

                          BEFORE THE ADMINISTRATOR
IN RE
     ROCKY MOUNTAIN PRESTRESS,  INC.
     and AERR.CO.,  INC.

                    Respondents
                                             TSCAt  PCB-83-017
INITIAL DECISION
                          CD
     Toxic Substances Control Act - Determination of Liability - In

     a situation where one contracts to have dust control oil applied
                                                      • 5"
     on its premises, which was later determined  to  contain detectable

     levels of PCBs,  both the applicator and the  property owner are

     guilty of violating the Act,  absent a  showing that the property

     owner had the oil analyzed prior to application.

     Toxic Substances Control Act - Duty of the Agency - When a property

     owner advises the Agency that it intends to  hire a certain firm to

     apply dust suppression oil to its premises and  inquires of ".the EPA

     as to whether or not it has any reason to doubt the reliability of

     such firm,  the Agency owes the regulated community the duty of

     advising  it of any dealings it may have had with such firm in the

     past.   The ultimate decision as to whether or not to use such firm

     then rests with  the property owner.

     Toxic Substances Control Act - Penalty Determination - When two

     respondents have violated a single count of a complaint, the court

     must apportion the penalty determined  to be appropriate between

     them based upon  their respective degrees of culpability considering

     all  of the facts surrounding  the violation.

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 4.    Toxic Substances Control Act - Penalty Determination - In deter-

      mining a Respondent's ability to pay a penalty, the court must

      consider any published Agency penalty policy and, unless factors

      are present which would argue against its application, should apply

      such policy as written.



 Appearances:


          Gary E. Parish, Esquire
          Denver, Colorado
          For Respondent AERR.CO., Inc.

          Gregory T. Hobbs Jr., Esquire
          Zach C. Miller, Esquire
          Davis, Graham and Stubbs
          Denver, Colorado
          For Respondent Rocky Mountain Prestress, Inc.

          Kent B. Connally, Esquire
          Daniel W. Hester, Esquire
          U.S. Environmental Protection Agency
          Denver, Colorado
          For the Complainant



                               INITIAL DECISION



Preliminary Statement

     This is a proceeding under § 16 (a)  of the Toxic Substances Control

Act (15 U.S.C.  2615(a)),  instituted by a complaint issued November 2,

1983 by the Director of the Enforcement Division,  Region VIII,  United

States Environmental Protection Agency (EPA),  against Rocky Mountain
                                    - 2 -

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 Prestress,  Inc.  (hereinafter RMP),  and AERR.CO., Inc.  (hereinafter

 AERR.CO.),  the Respondents herein,  for alleged violations of the Act and

 regulations issued thereunder.l

     Specifically,  the complaint alleges  that the Respondents violated
 »
 40 CFR §  761.20(d)  by applying or causing to be applied dust suppressant

 oil contaminated with PCBs.   The complaint was issued November 2, 1983.
                                  j*

 The complaint proposed a civil penalty in the total amount of $25/000.00

 for this  violation.                                    .  .

   . The  answers filed by  the Respondents admitted and denied various

 aspects of  the complaint 'as follows:   both Respondents admitted that the

 oil was applied  on the property  of  RMP on the date and'manner alleged in

 the complaint, but AERR.CO.  denied  that such oil contained any detectable

 amounts of  PCBs, and  RMP denied  (1) that  they were liable under the Act

 since  they  were  not a "user of the  contaminated oil as contemplated by

 the regulations";  and (2)  that even if such  a violation were-found, they

 were innocent of any  violation because of the special situation surrounding

 its deposition.
   Section 16(a) of the Act provides, in part, as follows:

          (a) Civil. - (1) Any person who violates a provision of
     section 15 shall be liable to the United States for a civil
     penalty in an amount not to exceed $25,000 for each such
     violation.  Each day such a violation continues shall, for
     purposes of this subsection, constitute a separate violation
     of section 15.

Section 15 of the Act (15 U.S.C. 2614) provides, in pertinent part, that
it- shall be unlawful for any person to "(1) fail or refuse to comply
with... (B)  any requirement prescribed by section...6, or (C) any rule
promulgated under section...6" or to "(3)  fail or refuse to  (A) establish
or maintain records — as required by this Act or a rule promulgated
thereunder."

                                      - 3 -

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     The parties sutmitted pre-hearing materials pursuant to § 22.19(e)



of the pertinent rules of practice.  A hearing was held on April 25-26,



1984 in Denver, Colorado.



     Following the hearing and the distribution of the transcript,  the



parties filed initial and reply briefs, findings of fact and conclusions



of law, all of which have been carefully considered by the court in the



rendering of this decision.








Factual Background



     Mr. Michael Bergin, an inspector of EPA,  first visited the premises



of RMP on May 10, 1983.  During that inspection, the plant manager



informed Mr. Bergin that the dirt roads in and around their facility



were going to be oiled soon pursuant to the requirements of their state



air pollution control permit which requires that the roads be treated



for dust suppression twice, a year.  Mr. Bergin explained to the plant



manager that the regulations of the Agency prohibit the use of oil



containing any detectable levels of PCB for dust suppression purposes.



Expressing some concern about this revelation, the plant manager asked



Mr. Bergin whether or not EPA had any concern  about the reputation of



AEER.CO. since that was the firm with whom they had contracted to apply



the oil.  Mr. Bergin initially stated that he  had inspected AERR.CO. and



was unaware of any specific information concerning that Company's prior



history but he would inquire on this subject of his colleagues at the



regional office and report back to the manager.   Upon his return to the



regional office, Mr. Bergin, upon making an inquiry among his colleagues,



reported back to RMP that AERR.QD. had never been found in violation of
                                      - 4  -

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 the PCB regulations.  Mr. Bergin suggested to RMP personnel that they
 get written assurances  from AERR.CO.  that the waste oil to be used on
 their roads contained no PCBs.   It  is alleged by Mr. Bergin that he
 informed the general  manager of  RMP that the only sure way to avoid
 liability under the PCB regulations was  to have the waste oil to be
 spread on the road analyzed for  PCB content prior to oiling.
                                   f
     Upon being advised that RMP intended to oil their roads in the near
 future, Agency personnel instructed Mr.  Dorance to visit the premises
 and take soil samples of the areas  to be oiled so as to provide background
 data to compare with  post-oiling sample  taking which the Agency intended to
 accomplish.  In furtherance to that direction, Mr. Dorance went to the
 RMP premises on May 26,  1983 and upon being advised that the oiling had
 not yet taken place but would occur on the upcoming weekend, weather
 permitting, Mr. Dorance proceeded tc  take samples from the roads that
 were to be oiled.  The  oiling took place on May 28, 1983, and on June 2,
 1983 Mr. Dorance returned to the RMP  facility to take after-oiling
 samples.  Mr. Dorance gathered a split sample in the same location south
 of the batch plant where he collected a previous sample and also took
 photos of the area sampled.
     The samples both before and after oiling were submitted to the EPA
 laboratory for analysis and said analysis revealed PCB concentrations of
 no greater than 5 ppra in either of the two pre-oiling samples.   The oily
 soil sample collected by Mr. Dorance on June 2nd following the oiling
 showed PCB contamination level of an average of 37 ppm of Arochlor 1254.
No PCB concentrations were reported of Arochlor 1242 and 1260,  although
 some low levels of those two polymers of PCBs had been found in the
pre-oiling analysis.

                                      - 5 -

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     Upon being advised of the presence of PCBs following the oiling,



 RMP contracted with several consultants for the purpose of:  (1) conduct-



 ing an extensive sample taking exercise of its own on the roads involved;



 and (2) to test all of the other oil on its premises to make sure that



 it was PCB-free.  The results of these sampling programs showed that



 there were, in fact, moderately high levels of PCBs throughout the oiled



 roads of RMP's facilities and that no other source of PCB contaminated



 oil is or was present on their property.  The conclusion drawn from this



 latter analysis was to conclusively show that the source of the PCBs



 found on RMP's premises did not come from any oil which it may use or



 have used in the course of its normal business processes.*



     None of the parties in this matter had subjected the dust suppression



 oil to laboratory analysis prior to its application on RMP's facilities.



 There was testimony from AERR.CO. 's witnesses to the effect that prior



 to the oiling tney had offered to have the oil tested by a reliable



 laboratory if RMP was willing to pay the $25.00 laboratory fee.  This



 allegation was vehemently denied by RMP" witnesses who stated that the



 only time any conversation was had concerning laboratory analysis of the



 oil came up in conversations between AERR.
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oil  to RMP's facility on the day of the oiling, there were printed:  "Dust



control oil from selected use crankcase oil not containing any PCB



source material."  RMP argues that, given the advice it received from



EPA  to the effect that they had no past problems with AERR.OO. in regard



to PCBs and that they felt them to be a reliable and reputable supplier,



it felt that it had taken all reasonable precautions under the circumstances



by requiring AERR.CO. to certify that the oil they supplied was PCB-



free.



     AERR. CO.' s position in the whole matter is that the oil that they



supplied to RMP's premises and which was subsequently applied by their



employees, in fact, contained no PCBs and that they, therefore, have no



culpability for the violation alleged in the complaint.








Discussion



     My disposition of this matter requires that I first determine the



liability of the two Respondents and, secondly, assuming that both



parties are found to be culpable,  to apportion the proposed civil penalty



among them based on their respective degrees of involvement.  The penalty



allocation exercise is required since the complaint only assesses one



civil penalty and makes no attempt to apportion such penalty between the



two Respondents.  The post-hearing briefs of both the EPA and RMP did,



however,  address this question of. apportionment in some detail.



     As indicated above,  RMP's defense to the complaint was two-fold.



The first one being that they are not liable for any violation since



they did not "use" the contaminated oil as that term is used in the



regulations.   The regulation applicable to this situation is found at



40 CFR §  761.20(d)  which states:






                                      - '7 -

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           "The use of waste oil that contains any detectable con-
     centration of PCB as a sealant, coating, or dust control
     agent is prohibited.  Prohibited uses include but are not
     limited to, road oiling, general dust control...11

     In support of its argument that the language of the regulation is

not applicable to it, RMP provides certain definitions of the word use

and attempts to conclude that they did not use the contaminated oil but

merely had it applied to their presrtises by a culpable applicator and

they were  merely an innocent third party.  EPA counters this argument

with a broader definition of the word use and users such as that found

in Black's Law Dictionary which includes within its purview one who

enjoys a benefit frcm such use.  Clearly RMP enjoyed a benefit from the

application of the PCB contaminated oil to its premises in that it was

required to utilize some form of dust control technology under the terms

of their state issued air pollution control permit and elected to use

oil for this function.  Clearly they benefitted frcm this application

and, of course, were the persons who ordered the oil to be applied.

This argument, although academically intriguing, can not be allowed to

stand since its acceptance by the court would be contrary to the express

purposes of the statutes and regulations promulgated thereunder.  To

allow this argument to stand would permit a person to cause contaminated

oil to be  applied to its premises by a third party and then appear later

and say they have no responsibility for the irresponsible acts of others.

Since one  of the purposes of the Act and the regulations is to prevent

the introduction of PCBs to the environment,  the interpretation suggested

by Respondent RMP would be contrary to that purpose and, therefore,

be unacceptable.   I am,  therefore, of the opinion that RMP did, in fact,

violate the terms of the above-cited regulation when they contracted

with AERR.CO.  to apply the oil to their property.


                                      - 8 -

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     Having determined that RMP is guilty of a technical violation of


 the Act and the regulations promulgated pursuant thereto, I must now


 address their degree of culpability in this matter.  As discussed above,


 RMP officials when being advised of the absolute prohibition against the
 »

 application of any PCB contaminated oil for the purposes of dust suppres-


 sion inquired of EPA agents as to whether or not it had any cause to be  .


 concerned about the reputation or liability of AERR.OO. particularly in


 the area of PCBs.  The advice that they ultimately, received from EPA was


 that their records revealed that AERR.CO. had not been found guilty of


 any prior PCB violations;  This advice, although technically true,


 was for all practicable purposes, inaccurate and misleading, since the


 record reveals that the Agency had, in fact, on a.prior occasion attempted


 to prosecute AERR.CO. for a PCB violation, which prosecution was subsequently


 withdrawn for reasons unrelated to this decision.  It, therefore, turns


 out to be the case that the EPA did, in fact, have sane reason to believe


 that AERR.CO. was not the most reliable supplier of oil in the area.  By


 failing to advise RMP of this fact, it lulled them into a sense of


 false security and as a result thereof RMP did not seek the services of


 another oil supplier, which they could have easily done, or gone to the


 expense of having the oil tested prior to its application.  Rather they


 relied upon the advice given to them by the EPA inspector to the effect


 that it would be a good idea to obtain sane sort of quarantee from


AERR.CO.  that the oil they supplied was PCB free.  RMP did request, and


obtain such guarantee from AERR.CO.


     At the trial, and in their post-hearing briefs, EPA points out that


RMP was negligent in not having the oil subjected to laboratory analysis


prior to' its application.   RMP counters this argument with the observation
                                      — Q _

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 that since EPA  is in the business of protecting the environment that



 perhaps  it was  derelict in not having the oil tested itself.  EPA's



 position on this point is that:  (1) they do not have the wherewithall



 nor  the  obligation to test all of the thousands of oil suppliers located
 *                 t


 within its Region; and (2) that in any event it is the ultimate responsi- . .



 bility of the user of the oil to see that it is contamination free.  EPA



 also points out that under-the regulations generally applicable to PCB



 matters  there is a J50 ppm limitation below which the Agency has no



 authority.  Although EPA is correct in its observation that it has no



 obligation nor  facilities or resources to test the oil in its geographical



 jurisdiction, under the circumstances of this case, a good argument



 could be made that EPA, knowing that the oil was to be used for road



 application purposes, a use that has no 50 ppm limitation, should have



 tested the oil  themselves.  Under the circumstances of this case, I need



 not  decide who  among the parties to this proceeding were the most derelict



 in their duty in not having the oil subjected to laboratory analysis



 since such determination is not crucial to my ultimate decision.



      In  this regard, I am of the opinion that RMP acted reasonably under



 the  circumstances and their failure to have the oil subjected to laboratory



 analysis prior  to its application was not negligent, given EFA's statements



 as to the reliability of the supplier and the fact that they did, in



 fact, obtain a guarantee of PCB-free oil.  In this regard it should be



 noted that the record reveals that RMP has used AERR.CO.  in the past as
                                                                    t
                                                                    i

 a supplier of dust suppression oil without any apparent repercussions.




     Section 16 of the Act which has to do with the assessment of civil



penalties in these matters,  requires that the Agency consider,  among



other things,  prior violations of the Respondent,  degree of culpability,
                                     - 10 -

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 and other matters as justice may require.  In evaluating Respondent RMP's




 degree of culpability in this matter, it should be noted that they have



 agreed to clean up the facility and transport all of the contaminated




 soil  to an approved disposal site at a cost of approximately $350,000.00.




 The record also reveals that the Respondent RMP has expended in excess




 of an additional  $50,000.00  for sample taking and analysis, and consultant.



 fees  (exclusive of attorney  fees). •• Considering all of these facts and




 applying the statutory mandate  of consideration of "such other matters




 as justice may  require",  I am of the opinion that RMP's degree of



 culpability in  this matter is relatively small.




      To the extent the record reflects a posture of cooperativeness and



 responsbility on  the part of RMP, the record reflects the opposite in



 the case of AERR.CO.  My  reading of the  record reflects that AERR.CO.




 has consistently  refused  to  share any of the costs of the subsequent



 investigation undertaken  by  RMP and its  consultants or to contribute in



 any way to the  costs of the  clean-up, discussed above.  AERR.CO. 's




 position in this matter is that they have no liability whatsoever since



 the evidence shows  (at  least in their view) that the oil which they




 delivered to RMP's  facility was PCB-free.  The post-hearing brief of



 AERR.CO.  rests  its defense in this regard entirely upon its analysis of




 the results of  the  sampling protocol accomplished by EPA and RMP.   As




 discussed above,  the initial sampling done prior to the oiling revealed




 the presence of low levels of certain Arochlors of PCBs.  Arochlor is a




 trade name utilized by Monsanto Company,  one of the primary producers of




 PCBs and the numbers follwing the designation Arochlor,   such as 1242,




1260,  and 1250,  merely reflect the number of chlorine molecules that are
                                     -'11 -

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bound in the ultimate product.  In its post-hearing brief/  counsel for


AERR.CO. engages in a rather imaginative and intriguing analysis of all


of the sampling done on the subject premises and takes the position that


since certain Arochlors were found at the first sampling which were not
 •
found in the more extensive subsequent samplings, demonstrate that all


of the PCBs ultimately'discovered on RMP's facilities were there prior
                                   t

to the May 28th oiling.  They argue''that since higher concentrations of


certain Arochlor isomers were found at depth and, in seme instances,


higher concentrations at the surface that, for the most part, certain of


the isomers were found in. some portions of the property and not in


others, and that this confusing array of data clearly demonstrates that


the dust suppression oil applied by AERR.CO. on May 28th contained


absolutely no PCBs.


     Although this argument is certainly intriguing, it ignores the


testimony of Mr." Topolski,  the only identifiable PCB expert to appear


and testify at the hearing.  Mr. Topolski, who was the president of one

                                       \
of the consulting firms hired by RMP, has an impressive array of credentials


in the area of PCB chemistry, analysis, control and disposition.  It was


Mr. Topolski's uncontroverted testimony that the PCBs found on the


premises of RMP were the result of a single application and that that


application was the one done by AERR.CO. on May 28th.  Mr.  Topolski, after


explaining in some detail how PCB oil is manufactured,  testified that


the variety of results shown by the sampling protocols and  the laboratory .


analysis, thereof, are consistent with his understanding of the behavior


of PCBs in the environment.  For one thing, he explains the absence of


the laboratory discovery of certain PCB Arochlors in the subsequent
                                     -'12 -

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samplings by his explanation that in serve cases a higher concentration



of certain PCB Arochlors will mask the presence of other Arochlors which



are present in smaller concentrations and that sijnply because one only



finds a particular Arochlor, upon laboratory analysis, does not necessarily



mean that the other forms of Arochlors were not, likewise, present.  He



also explains that the different concentrations of PCBs found at different



depths throughout the Respondent' s ^premises are explained by the difference



in the matrix of the soils upon which the PCB oil was applied, the



effect of sunlight and other chemicals that might be present in the



soil.                    .  .



     As we discussed above, none of the parties to this proceeding



performed any laboratory analysis on the oil at any time prior to its



application.  The record does reveal, however, that the tank in which



AERR.CO. stored the oil which it ultimately applied to the premises of



RMP, did contain PCB contaminated sludge.  One of the employees of



AERR.CO. testified that the tank in question was accidently punctured by



one of its employees with a forklift while practicing the use of that



device and that the tank was subseqently cut up for scrap.  The whereabouts



of its component parts is unknown to AERR.CO. officers.  Given the



nature of PCBs,  that is, that they do not degrade in the environment .but



are, on the contrary, extremely persistent, leads one to the conclusion .



that the oil applied by AERR.CO. was most likely contaminated with PCBs



and, despite counsel's ingenious arguments to the contrary concerning



the results of the analysis of the samples obtained from the RMP premises,



I am of the opinion that the oil which AERR.CO.  applied did, in fact,
                                     -13 -

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     in detectable limits of FCBs.  It necessarily follows that AERR.CO.,



 likewise, violated the provisions of the Act and the regulations by



 applying PCB contaminated oil to the premises of RMP.



     Having determined that both of the Respondents violated the Act and



 the applicable regulation, I must now determine whether or not the



 penalty proposed by the Complainant is appropriate and, if so, how that



 penalty should be allocated between the two Respondents.








 Penalty Assessment and Allocation



     In the pre-hearing exchange directed by the court, EPA was required



 to explain in some detail how it calculated the proposed penalty as



 found in the corplaint.  Their response indicated that the penalty was



 calculated in accordance with theTCB penalty policy found in 45 F.R.



 59776.  The use of this penalty policy in these matters is recognized



 both by the pertinent regulations and has been cited with approval by



 the undersigned and all of his colleagues in similar cases.  EPA's



 witness at the hearing on the question of penalty calculation was Mr. J.



 William Geise, who is the chief of the Toxic Substances Branch of Region



 VIII, EPA.  After explaining that he used the above-mentioned penalty



 policy in calculating the proposed penalty in this case, Mr.  Geise went



 on to describe how the penalty policy is structured and how he applied



 the various elements of the penalty policy to the facts of this case in



 arriving at the penalty set forth in the complaint.   What the penalty



policy does is take the various elements set forth in the statute,



which the Administrator must consider in arriving at a penalty in these



cases,  and discusses them separately and in some detail.  The policy
                                     - 14  -

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 contains a table which has in it a matrix of suggested penalties ranging



 from $200.00 to $25,000.00, the statutory maximum.  The matrix has on



 one axis, an array of columns to measure the extent of potential damage



 under the categories "major", "significant", and "minor".  On the other



 axis, there is a description of circumstances surrounding a violation



 (probability of damages). This axis is divided into three categories:



 high range, mid-range, and low range, which are further subdivided into



 two levels.  Therefore,  the matrix presents six levels of probability of



 damage on one axis and three levels of extent of potential damage on the



 other.



     Mr. Geise placed the "probability of damage" in the- high range and



 major category based on  the language of the policy which states that



 "the Agency chose to prohibit these areas whenever detectable levels of



 PCB were present, because any such use of PCB is likely to result in



 widespread environmental and health damage."  The witness said that



 since that language suggests to him that the discharge of PCB contaminated



 oil for road oiling purposes would result in widespread health and



 environmental problems, that that was similar to the type of penalty



 that the policy discussed under the "improper disposal" category of



 PCBs.  Having determined the appropriate place on the two axis of the



matrix which are appropriate to this matter, reference to the policy



 shows that the appropriate penalty for this violation would be $25,000.00.



 I have no argument with the Agency's penalty assessment in this case and



ray reading of the briefs of the parties indicates that Respondent,  PMP,



does not either,  but they say that they are not responsible for any of



it.  On on the other hand,  AERR.CO.  says they do not have much of an



argument .with it either except that by reference to that same penalty
                                     - 15 -

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s
          policy their liability can not exceed four per cent of the average of

          their last four years gross sales which results in a substantially

          smaller number than $25,000.00.  Having determined that $25,000.00 is an

          appropriate penalty to be assessed in this case, I must now make a

          determination as to how to equitably apportion that number between the tvro

          Respondents.

               Under the circumstances, I am of the opinion that, although PMP is

          guilty of violating the above-cited regulation, its culpability in this

          matter is extremely small given the steps it took to assure that the oil

          to be applied was PCB-free and, just as importantly, its cooperative

          attitude in assuring that the contaminated soil will be 'cleaned up and

          removed at a cost of approximately $350,000.00, in addition to the more

          than $50,000.00 that RMP was forced to expend in hiring consultants and

          running its own tests on the premises, all of which demonstrated a

          position of cooperation and corporate responsibility.  I am, therefore,

          of the opinion that the $25,000.00 should be allocated on the following

          basis:  80 per cent to AERR.CO., and 20 per cent to RMP.  I further am

          of the opinion that the $5,000.00 penalty allocated to RMP should,

          in this case,  be reduced to $-0- on the condition that within sixty (60)

          days from the date of this decision RMP has cleaned up the premises and

          removed the contaminated materials to an authorized site and that such

          fact has been certified to the Agency.

               Having determined that,  under the circumstances of this case,

          AERR.QO.  should be assessed a penalty of $20,000.00,  I must now address

          AERR.CO. 's argument that even if they are found to be liable for some

          penalty,  it can not exceed 4  per cent of the last four-year average of

          gross sales, which in this case turns out to be $8,990.00.
                                               -  16 -

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      Section 16 of the Act requires  that in assessing a civil penalty,

 the Administrator must consider the  following:

           "In determining  the amount of a civil penalty,  the
      Administrator shall take into account the  nature,
      circumstances,  extent, and gravity of the  violation  or
      violations and, with  respect  to the violator, ability to
      pay,  effect on ability to  continue to do business, and
      history of prior  violations,  the degree of culpability, and
      such  other matters as justice may  require."   (Brphasis
      supplied.)

      The regulations which establish the rules  of procedure in these

 cases found at 40 CFR  22 states in § 22.27(b) that:

           "If the presiding officer  determines  that a violation
      has occurred,  the presiding officer shall  determine  the
      dollar amount of  the  reconmended civil penalty to be assessed
      in the initial decision in accordance with any criteria
      set forth in the  Act  relating to the proper amount of a civil
      penalty,  and must consider any  civil penalty guidelines issued
      under the Act.  If the presiding officer decides to  assess a
      penalty different than the amount  from.the penalty recommended
      to be assessed in the complaint, the presiding officer shall set
      forth in the initial  decision the  specific reasons for the
      increase or decrease."

      During the  course of  the hearing in this matter, counsel for AERR.OO.,

 revealed that his client has a.  serious  problem  as to  its  ability to pay

 a penalty  under  the Act and the penalty policy.  This disclosure came as

 a relative surprise to the court and the other parties since the usual

 practice is that if a  Respondent in  these matters wishes  to contest the

 amount of  the  penalty based on  its inability  to pay,  such defense must

 be raised  in its answer.  No such defense was set forth in AERR.OO. 's

 answer to  the  complaint and, thus, neither  the court nor  the other

 parties  were aware that this defense would be forthcoming until the

middle of  the  trial.  When this procedure was made known  to counsel for

AERR.CO., he agreed to provide the other parties and  the court with

certain  financial documents, such as—income  tax returns and financial
         •

statements—as proof of his client rs inability to pay the proposed


                                     - 17 -

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penalty.  Pursuant to a post-hearing order issued by the court, Respondent,

AERR.CO. provided copies of its income tax returns and other financial

data for the years 1980 through 1983 and, although counsel for the

Complainant objected that these returns were not signed and therefore
•
unreliable, I have no reason to suspect that counsel would provide false

documentation to a Federal agency, an act which is associated with

substantial criminal sanctions.  The documentation provided by AERR.CO.

reveals that the gross sales of that Company were as follows:  1980 '-

$163,617.00; 1981 - ?313,973.00; 1982 - $212,000.00; 1983 - $209,405.00.

These figures total $898,995.00, giving an average of $224,749.00,

which when multiplied by 4 per cent results in a figure .of $8,990.00.

     Referring to the above-mentioned penalty policy, one finds that in

assessing a Respondent's ability to pay and ability to continue in

business as used in the statute, it is believed that a year's net income

as determined by a fixed percentage of total sales will generally yield

an amount which the firm can afford to pay.   The policy goes on to state

that:  "the average ratio of net incomfe to sales level for U.S. manufactur-

ing in the past five years is approximately 5 per cent.  Since small

firms are generally slightly less profitable than average size firms,

and since small firms are the ones most likely to have difficulty in

paying TSCA penalties,  the guideline is reduced to 4 per  cent."  The

penalty policy then goes on to say that for purposes of calculating the

ability to pay,  figures for the current year and the prior three years

should be averaged.   Four per cent of the average sales will serve as

the guideline for what the ccnpany has the ability to pay.
                                    -'18 -

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     The testimony of AERR.OO. 's officers .and employees indicate that


over the past several years the Company has consistently lost money,


and as counsel for AERR.CO. states in his brief even the $8.990.00,


as calculated by the penalty policy, would be practicably impossible for
o

this Respondent to pay, given its continuing negative cash flow.


     Although the court is not absolutely bound by any published penalty
                                  _<.

policy of the Agency in assessing ah appropriate penalty in these cases,


should the court deviate from the terms thereof it .must explain the


reasons for such differences.  In this particular case, I am unable to


establish a creditable argument for increasing the assessed penalty


against AERR.CO. given the clear language of the penalty" policy and the


absence of any other factors which would argue against its application


in this case.  Unlike most of the numbers suggested by this penalty


policy, which involve a great deal of subjective evaluation, the "ability


to pay" portion of the policy is totally objective in that it requires


only the application of arithmetic to arrive at a given figure.  Since I


have no reason to suspect the figures provided by AERR.CO. in response


to the court's post-hearing order and the clear, unequivocable language


of the penalty policy applicable to these proceedings, I must reduce the


assessed penalty applicable to AERR.CO. from $20,000.00 to $8,990.00,


based on its inability to pay.


     In making this determination, I must observe that it is unfortunate


that a Company possessing such meager funds is able to cause the potential


for such widespread environmental damage, and in the course of doing so,


has caused a relatively innocent party to expend in excess of $400,000.00


to- clean up the mess made by the more culpable and apparently more


irresponsible party.
                                     - 19 -

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      In arriving at this conclusion, I have carefully considered the

 entire record in this case, consisting of the transcript, the exhibits

 and the briefs of all the parties.  All contentions of the parties

 presented for the record have been considered, and whether or not specifi-

 cally mentioned hereinj  any suggestions, requests, etc., inconsistent

 with this initial decision are denied.
                                     ORDER2
     Pursuant to §  16 (a) of the Toxic Substances Control Act  (15 USC

 2615(a)), a civil penalty of $8,990.00 is hereby assessed against

 Respondent, AERR.OO., Inc., for the violation of the Act found herein.

     Pursuant to §  16 (a) of the Toxic Substances Control Act  (15 USC

 2615(a)), a civil penalty of $5,000.00 is hereby assessed against

 Respondent, Rocky Mountain Prestress, Inc., which penalty shall be

 reduced to $-0- contingent upon Rocky Mountain Prestress, Inc. cleaning

 up the subject site and removing the contaninated material to an approved

 disposal site in accordance with an approved procedure agreed to by the

 Complainant.  Such  clean up and disposal mast be accomplished within 60

 days of the date of this Order and certified to by the Complainant.

 Failure to accomplish such clean up and disposal shall result in the

 assessment of the full $5,000.00 penalty herein established against said

 Respondent.
  2Unless an appeal is taken pursuant to § 22.30 of the interim rules of
practice, or the Administrator elects to review this decision on his own
motion, the Initial Decision shall become the final order of the Administrator,
(See § 22'.27(c)).


                                     - 20 -

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     Payment of the full amount of the civil penalties assessed shall be


made within sixty (60) days of service of the final Order upon Respondent/


AERR.CO., Inc., by forwarding to the Regional Hearing Clerk a cashiers'


check or certified check payable to the United States of America.


     Should Respondent, Rocky Mountain Prestress, Inc., fail to comply


with the conditions set forth here^in within the time periods established,
                                  v t

payment in the full amount of the assessment against said Respondent


shall be paid in a like manner.
                                   Thomas B. Yost /
                                   Administrative ^aw Judge
DATED:  August 23,  1984

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34

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         BEFORE THE ADMINISTRATOR
                                                                             s
 In the Matter of                    J                                        "P.
                                    )
    Suburban Station,.               )   Docket No. TSCA-III-40

                  Respondent        )


 1.   Toxic Substances Control Act - PCB - In cleaning up PCBs  disposed of
     prior to February 17, 1978,  each container of waste generated  during
     the clean-up is "removed from service" when it is filled,  and  if
     stored for more than 30-days after it is filled must be stored in a
     facility that complies with  761.65(b).

 2.   Toxic Substances Control Act - PCB - The owner of Suburban Station,
     Southeastern Pennsylvania Transporation Authority (SEPTA), which
     licensed the City of Philadelphia to make improvements in  the  Station
     as part of a project being constructed by the City, held  not jointly
     and severally liable with the City for storage violations  occuring
     during a clean-up of PCBs where the clean-up had been performed under
     the direction and control of the City and SEPTA was not involved  in
     the clean-up.                                           -

3.   Toxic Substances Control Act - PCB - The failure to provide proper con-
     tainment for containers of PCBs generated during a  clean-up which  took
     ten months, while the containers were stored at the clean-up site,
     assessed a  penalty as one single violation.   Complainant's  claim  that
     the penalty should be assessed as three separate violations rejected
     because under the  penalty guidelines multiple penalties are discretionary
     and Complainant had not shown that the single penalty was  not  an
     appropriate penalty.
Appearances:
               Margaret  M.  Cardamone,  United  States Environmental
               Protection Agency,  Region  III, Philadelphia, PA,
               for Complainant.

               Vincent J. Walsh, Jr.,  Southeastern Pennsylvania
               Transportation Authority,  Philadelphia, PA,
               for Respondent.

               William J. McManus, Assistant  City Solicitor, City
               of Philadelphia, PA, for Respondent.

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                              INITIAL  DECISION


      This is a proceeding under the Toxic Substances Control Act ("TSCA"),

 section 16(a), 15 U.S.C. 2615(a), to  assess civil penalties for violation

 of a  rule promulgated.under section 6(e) of the Act, 15 U.S.C.  2605(e),

 regulating the manufacture, processing, distribution in commerce, use,
                                  /•
 disposal, storage and marking of pfrlychlorinated biphenyls ("PCB Ban

 Rule"), 40 C.F.R. Part 761. !_/  The administrative complaint issued by

 EPA Region III, charged that Respondents Southeastern Pennsylvania Trans-

 portation Authority, the City of Philadelphia and Penn Central Corporation

 improperly stored PCBs removed during a PCB cleanup at Suburban Station.

 A penalty of $45,000 was requested.

     Penn Central Corporation on fts unopposed motion was dismissed as a

 party to the proceeding.  Respondents the City of Philadelphia and South-

 eastern Pennslyvania Transportation Authority answered, contes-ting both

 the violation and the appropriateness of the proposed penalty.

     A hearing was held in Philadelphia, PA on April  3, 1984.   Thereafter

 each party submitted proposed findings of fact, conclusions of law and a
                     _i :
 proposed order with a supporting brief.  On consideration of the entire

 record and the submissions of the parties,  a penalty  of $15,000 is

 assessed against Respondent the City of Philadelphia.  The complaint is

 dismissed  against Respondent Southeastern Pennsylvania  Transportation
I/   Section 16(a)  provides in pertinent part  as follows:   "(1)  Any person
who violates a provision of section  15 shall be liable  to  the  United States
for a civil  penalty in an amount not to exceed $25,000  for each  such
violation.   Each day such violation  continues  shall,  for the purposes of
this subsection, constitute a separate violation of section 15."

     TSCA,  section  15, makes it unlawful  among other  acts,  for any  person to
"(1) fail  or refuse to comply with . . . (c) any rule promulgated  .  .  .
under section ... 6."

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 Authority.  The findings, conclusions and reasons for the assessment of
 this  penalty follow.  All proposed findings and conclusions inconsistent
 with  this decision are rejected.
                             Findings of Fact
 1.    Respondent Southeastern Pennsylvania Transportation Authority ("SEPTA")
      is a transportation authority-authorized under Article III of the
      Pennsylvania Urban Mass Transportation Law,  55 P.S. Sec.  600-301,
      et. seq.  SEPTA is the owner of Suburban Station located  at 16th Street
      and John F.  Kennedy Boulevard, Philadelphia, Pennsylvania.  SEPTA has
      operated commuter rail  services into Suburban Station since January 1,
      1983.  Stipulation of the parties,  Transcript ("Tr.") 2.
 2.    Respondent,  the City of Philadelphia ("City"),  is  a city  of the first
     class located in the Commonwealth of Pennsylvania.   The City under
     a grant from the U.S. Urban Mass Transportation  Administration  is
     constructing a project  known  as  the  Center City  Commuter  Connection.
     This work  involved major construction in and the renovation of
     Suburban Station.   Tr.  136;  Stipulation,  Tr.  3.
3.   The City discovered that the  track bed and adjacent areas  in Suburban "
     Station where the  construction and renovation work  would be  done  were
     extensively  contaminated with PCBs,  apparently as a result of PCBs
     having  leaked from train transformers  onto the track  beds  over  a
     period  of  many years.   Samples taken  from various locations  in  the
     work  site  showed concentrations  of PCBs  ranging  from  720 ppm to
     530,000 ppm.   Complainant's Exh. 5; Complainant's Exh. 6,  p. 1;
     Complainant's  Exh.  8, Attach. A.
4.   In  March 1982,  at  the City's  request,  representatives of the EPA met
    with  representatives of the City to discuss decontaminating  Suburban
     Station of PCBs.   Tr. 7-9, 35.

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  5.   At the meeting, the City was told that once the PCB contamination

      was disturbed the PCBs would have to be stored, marked and disposed

      of in accordance with the PCB regulations.  A copy of the PCB regula-

      tions was given to the City.  Tr. 8-9.
                                  s
  6.   On August 24, 1982, the EPA met with the City to again discuss the

      decontamination of Suburban Station.  One item discussed was the

      storage of the cleaned-up PCBs until they were disposed of.   The

      EPA told the City that under the PCB regulations the temporary

      storage of PCBs without curbing could not exceed 30 days.  2/  Tr.  18,

      72-73.

  7.   As a follow-up to the August 24th meeting, EPA representatives,

      Christopher Pilla,  Edward Cohen and  Roland Shrecongost,  on September 9,

      1982, made an inspection of Suburban Station.   The inspection  had  been

      arranged  with Thomas  Burns,  the City's  resident  engineer for the

      Suburban  Station renovations,  who was present  at the inspection.   Tr. 19,

      97,  107.

 8.   Mr.  Pilla on the''September  9 inspection  saw a  number of  drums  of PCB

      waste material  stored  on  the platforms in  areas'which were not curbed.

      He told Mr.  Burns that the  regulation required that  drums  stored for more

      than 30-days  must be stored  in  a  curbed  area.  He  also suggested that as

      an alternative  to curbing the City could  use metal catchpans for contain-

      ment.  Tr.  20,  43-44,  77, 103.
 21   See the storage for disposal requirements, 40 C.F.R. 761.65, which in
-The testimony is referred to under its former numbering, 40 C.F.R. 761.42.
 Effective May 6, 1982, the PCB Ban Rule was renumbered without any substantive
 changes.  47 Fed. Reg. 19526 (May 6, 1982).  References in this opinion will
 be to the present numbering.

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 9.   On October 26, 1982, the City  wrote  to  the  EPA about  its.progress in

     the PCB cleanup at Suburban Station. With  respect to the drums of

     PCB waste, the City stated as  follows:

          Approximately 450 drums containing PCB waste were generated
          by the clean-up. . .  . [T]hese drums  will  be expeditiously
          removed from the Station/  and  transported  to SCA  Services'
          hazardous waste facility  in Model  City, New York for final
          disposal.  Our analysis has determined that all  the  waste  can
          be considered solid for purposes of disposal.

     Complainant's Exh. 7, Attach.  4.
                                 t
 10.  On February 28, 1983, the  EPA  received  a complaint  from a  private

     citizen that drums of PCBs were located on  a publicly accessible train

     platform at Suburban Station (Tr.  22, 39, 53;  Complainant's  Exh.  7,  p.  1),

 11.  Mr. Pilla called Mr. Burns and arranged to  inspect  Suburban  Station  on

     March 1, 1983.   On that day, Mr. Pilla  saw about  200  drums of PCB

     material on platform No. 3.  The area was not  curbed  and ..the drums were

     not contained in metal  catchpans.  Tr.  23, 32; Complainant's Exh. 7,

     p. 2.   .

12.  At the March 1st inspection  Mr. Pilla was handed  a  letter  from  the City

     dated March 1,  1983,  stating that 500 drums of PCB  solid waste  and

     construction debris  had been generated  by the  cleanup  of the Station and

     were being assembled for transportation to an approved PCB landfill.  It

     was further stated that the  drums were  scheduled to be removed  from the

     Station  over the  weekend of March 12-13.  Tr. 29-30; Complainant's

     Exh.  7,  Attach. 3.

13.  Mr.  Pilla  inspected  Suburban Station again on March 13, 1983.   All

     drums  of PCB  waste had been removed from the Station.   He  also  in-

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                                     5
      spected the underplatform areas where the drums had been stored.
      None  of these storage  areas  had any curbing nor was there evidence
      of any metal catchpans having been used.  Tr. 31, 56; Complainant's
      Exh.  7, p. 2.
 14.   The approximately 500 drums  of PCB contaminated material collected
      during the Suburban Station  cleanup were filled between May 1932 and'
      February 1983 (Tr. 43, 98-100).
 15.   SEPTA as owner of .Suburban Station granted to the City a license to
      come  upon the Station property to do the construction and renovation
      work  for the Center City Commuter Connection project.  It was the City
      however, which obtained the  federal grant to fund the project and
      contracted for the work to carry it out including the clean-up of PCBs
      at Suburban Station.  The City selected and engaged the services of the
      contractor to do the PCB clean-up  and  decided what the work  would include.
      Tr. 103, 109, 133, 136-37; Stipulation,  Tr.  2-3;  Complainant's Exh.  8.

                        Discussion and  Conclusions
     The specific, storage violations charged in the complaint were that drums
of PCB waste material  designated for disposal  had been  stored in  facilities
which did not have proper curbing,  and which were below the 100-year flood
water elevation.   The  charge that the PCB drums were stored below the 100-year
flood water elevation, however,  was withdrawn  at the beginning of the hearing. 3_/
Consequently the  only  violation  remaining to be considered  is whether there was
a violation of the requirement that the drums  should have been stored in
facilities  having continuous curbing at least  six inches high.
3/   Tr.  3-4.

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 See 40 C.F.R. 761.65(b)(l)(ii).   The  record  also  disclosed  that  in  lieu  of
 continous curbing,  the EPA would  have accepted  the  use  of metal  catchpans
 as an alternative means of providing  containment. 4/  It  Is not  disputed
 that the PCB drums  were not stored either  in a  facility with continuous
 curbing or on metal  catchpans.
      The EPA's position with respect  to the  violation is  straightforward.
 There was no obligation to clean  up the PCBs  on the  track beds and  adjacent
 areas since they were  "historical" PCBs, i.e.,  had been in  place  prior to
 February 17, 1978,  the  date  of publication of the original  PCB Disposal  and
 Marking Rule.  5/ Each  container  of PCBs resulting from the clean up, however,
 and stored for disposal, according to 40 C.F.R. 761.60(a)(6) and  (c)(3), must
 be stored in a facility that complies with 761.65(b), unless it  is  "temporarily"
 stored for no more  than  30 days from the date of its removal from service.
      The City's position appears  to be that the governing date for  the storage
 requirements is when the clean-up was completed and  all the PCB filled drums
 were removed from the decontamination site for a shipment to a disposal  site.
 It relies  upon  a  note'-placed as a preamble to the storage and disposal regu-
 lations under Subpart D  which reads in pertinent part as follows:
                 NOTE:  This Subpart [D] does not require removal
                 of PCBs  and PCB Items from service and  dis-
                 posal earlier than would normally be the case.
                 However, when PCBs and PCB Items are removed
                 from service and disposed of, disposal  must be
                 undertaken in accordance with these  regulations.
                 PCBs (including "soils and debris) and PCB Items
.4/   Findings of Fact No.  9, supra.
 5/   See 43 Fed. Reg. 7150.  The disposal  and marking requirements were
 subsequently incorporated  into the final  PCB Ban Rule.  See 44 Fed. Reg.
 31514 (May 31, 1979).

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                which  have  been  placed  in  a  disposal  site are.
                considered  to  be  "in service"  for  purposes of
                the  applicability of this  subpart.   This  sub-
                part does not  require PCBs and PCB  Items  land-
                filled, prior to  February 17, 1978  to  be removed
                for  disposal.  However, if such PCBs  or PCB
                Items  are removed from  the disposal site,  they
                must be disposed  of in  accordance with this
                subpart. *  * *

      The City  argues that the  decontamination  site  at Suburban Station is

 a "disposal site" under the definition  of "disposal"  in the PCB Ban Rule

 (40 C.F.R. 761.3(b)).  Accordingly, the City claims that  as long as the

 PCB filled drums remained on the  decontamination site they were considered

 to be in service and not subject  to the storage for disposal requirements.

 Such an  interpretation rests upon  reading considerably more into the note

 than is  justified by its wording.

      For purposes of this decision it can be assumed  that  the decontami-

 nation site is a "disposal  site" within the meaning of the  note.   The

 language in the note referring to the removal  of PCBs "from service",

 however,  can also refer to the cleaning up of the PCBs by  scraping, de-

 greasing, washing, etc. from the surfaces where they  had been deposited.  6/

 In  fact,  this would be the most obvious way to  read the note.   It  would seem

 that PCBs are usually placed in a disposal  site to be permanently  disposed

"of  there.  Under the note,  then,  they would be considered  to remain in

 service  as long as they were undisturbed.  In any event, the lack  of merit

 in  the City's argument is demonstrated by the fact that under the  City's
 6/   The parties themselves characterize the cleaning up of the PCBs as
 the removal of PCBs.  See Complainant's Exh. 7, Attachment 2,  where the
 Oity in writing to the EPA in October 1982, says, "[the contractor] has
 recently successfully completed its clean-up efforts at the Station.  In
 the areas that were cleaned, 95-99 percent of the PCBs that were present
 have been removed."  The "removal" referred to was obviously to the clean-
 up of the PCB material itself and not to the shipment of the drums, since
 the drums were still being stored at the station.

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                                    8


 interpretation the PCB drums could have been stored indefinitely at the
                                                                    •
 site,  which would have been tantamount to permitting their disposal at

 other  than at an EPA approved facility.  The City,  however, never questioned

 that the drums had to be eventually disposed of at  an EPA approved facility. TJ

     I find, accordingly, that the. storage requirements became applicable once

 the PCBs were removed by scraping, degreasing,  washing, etc. from the surfaces

 where  they lay. &/

     Section 761.65(c)(l) of the regulations, however, permits the temporary

 storage of certain PCB items for up to 30 days  without complying with  the

 storage requirements, provided that there is attached to the item a notation

 indicating the date it was removed from service.  The pertinent language is

 as  follows:

                       (c)(l)  The following  PCB Items may be
                       stored  temporarily in an area  that does
                       not comply with the requirements of
                       paragraph (b) of this section  for up to
                       thirty  days from the  date of their re-
                       moval from service, provided that a
                       notation is attached  to  the PCB Item or
                       a  PCB Container (containing the item)
                       indicating the  date the  item was removed
                       from service:
                         (i) Non-leaking PCB Articles and PCB
                       Equipment;                 '  •
                         (ii)  Leaking  PCB Articles and PCB
                       Equipment if the PCB  Items are  placed in
                       a  non-leaking PCB Container that contains-
                       sufficient  sorbent  materials to absorb  any
                       liquid  PCBs  remaining in the PCB Items;
TJ   Although the City first  considered entombment of the PCBs at  a  specially
constructed facility at the Station, it finally decided against this,
apparently because of the  difficulty of obtaining EPA approval of  the  pro-
cedure.   Tr.-71-72.

8/   The clearest application of the note would be to the obligation to  re-
cfispose  of PCBs  which had  been disposed of prior to the publication of the
PCB regulations.   A study  of the legislative history of the note indicates
that the language of the note relied on by the City had its origin in just
such a situation.   See 43  Fed. Reg.  -33918-919 (August 2, 1978).

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                         (iii) PCB Containers containing non-
                       liquid PCBs such as contaminated soil,
                       rags, and debris; and
                         (iv) PCB Containers containing liquid
                       PCBs at a concentration between 50 and
                       500 ppm, provided a Spill Prevention,
                       Control and Countermeasure Plan has been
                       prepared fw the temporary storage area in
                       accordance*with 40 CFR Part 112.  In
                       addition, each container must bear a
                       notation that indicates that the liquid in
                       the drum do not exceed 500 ppm PCB.
     It is  to be noted that the temporary storage permitted is for the
 PCB containers filled with the PCB material  rather than for the material
 itself.  It is assumed, however, or at least no one has argued to the
 contrary, that in cleaning up PCBs, the PCB  material, as  part of the
 clean-up, can be put into containers with the containers  then becoming
 subject to the 30-day temporary storage rule.
     SEPTA argues that the regulation in speaking of removal  from service
 uses terms appropriate to a group of containers, i.e.,  "their removal  from
 service", and that, therefore,  it was intended that where a number of con-
 tainers are filled in a clean-up which continues over a period  of time, the..
 30-day storage period starts to run from the date the last container is
 filled.  Under this construction there would have been  no violation  since.
 the containers were shipped for disposal  within  30-days after the last
 container was filled.  The  logical  reading,  however,  is that  the  plural
 "their" in the phase "their removal  from service" simply  refers generally
to the  several  different  kinds  of PCB items,  PCB containers being only one
such item,  for which temporary  storage is  permitted,  and  that that particular
provision  was not intended  to deal  with determining the date  on which  any
particular item was removed from service.

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                                    10
      SEPTA'S  interpretation is also questionable because the result of
 permitting the  storage of containers in a substandard storage area for 8
 to 10 months, seems totally inconsistent with the entire thrust of the regu-
 lation which  is to limit temporary storage to 30-days.  This is even more
 apparent  when one examines the legislative history of the regulation.
      The  original marking and disposal rule permitted the temporary storage
 only  of PCB articles and equipment if they were non-leaking or in non-
 leaking containers. _9/  PCB articles and equipment are manufactured items
 other than containers such as transformers, or capacitors or electric
 equipment. IP/  When the PCB Ban Rule was issued, the regulation was amended
 to permit the temporary storage of PCB containers of non-liquid wastes and
 of liquids with low concentrations (50-500 ppm) of PCBS.  With respect to
 containers of non-liquid wastes, it was explained that their temporary storage
 was permitted because such containers do not pose any greater hazard than
 non-leaking containers of leaking articles,  ll/  With an article like a
                                          i
 transformer or capacitor there would usually be no question of the date when
 it  is  removed from service,  the word service being given its normal  meaning"
 of  being in-use.  This appears to be the meaning that "service"  also has
 in  the phrase "in service"  in  the preamble to Subpart D.  It is  obvious,
9/  Marking and disposal  rule,  section  761,42(c)(l), 43  Fed.  Reg.  7162
TFebruary 17, 1978), as amended by  43 Fed.  Reg'. 33198  (August 2, 1978).
Section 761.42 along with the other provisions of  the  marking and  disposal
rule was incorporated with modifications  and  amendments  into  the PCB  Ban
Rule.  Supra, n 5.  Section 761.42  was  redesignated 761.65  at 47 Fed.  Reg.
19527 (1982).
10/  Marking and disposal  rule, sections  761.2(r),(v), 43 Fed.  Reg. at
7T57.  These definitions  are now found  in  761.3(t), (w).
Vl/  44 Fed. Reg.  31523-524 (May 31, 1579).

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                                    11
 however, that the words "in service" cannot be used in the same sense


 when applied to the subsequently added containers of contaminated soil

 and debris.  The reasonable interpretation is that the 30-day period is
                      .                          >
 to be determined by reference to the date the container is filled with
                                 \ ^
 soil and debris, and SEPTA's argument, in fact, assumes as much.  Where

 SEPTA'S argument fails is in attempting to give the words "in service" a

 technical meaning that would prolong the period beyond 30-days for individual


 containers because the clean-up took several  months.  No reason appears and

 none is offered by SEPTA as to why each container of the 500 ultimately used

 to hold all of the clean-up material, once it was filled, could not within

 30-days either have been placed in a proper storage facility or shipped for

 disposal.  Such treatment  would have been clearly within the intendment of the

 rule, as expressed in  the  legislative history,  that no PCB item (i .e., the


 filled container) could be temporarily stored for more than 30 days.  On the
                                     \
 other hand, under SEPTA's  interpretation,  the risk of  of potential  harm created

 by having PCBs stored  in substandard facilities would  be increased by allowing
                    .* :
 the temporary storage  of containers  for several  months,  a result plainly

 contrary to what was intended  by  the regulation.

     I  find,  accordingly,  that  each  container containing PCBs  generated by


 the clean-up, could be temporarily  stored  for only 30-days from the  date it

was filled  with PCBs.   A container stored  for a  longer period  had  to be

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                                    12


 stored  in an area meeting the requirements of 761.65(b). 12/  .The record
                                                         ™^^^    .     •

 shows that  containers filled with PCBs from the clean-up were stored  for  more

 than 30-days in areas that were not curbed as required by 76l.65(b)(i1).  13/

 Nor were such  containers placed on metal catchpans, which would have  been

 an acceptable  alternative to curbi/ig. 14/

      It is  also argued by SEPTA that curbing is required only if liquid wastes

 are being stored, and none of the containers contained liquids.  The  EPA

 takes issue with SEPTA'S characterization of its wastes as non-liquid, citing

 the testimony  of Mr. Shrecongost that some of the containers may have held

 sludge  which he described as "solid, fairly wet material." IS/  All waste

 generated in the clean-up, however, appears to have been sufficiently solid

 in nature that it could be disposed of as solid waste. 16/  In any event, no

 distinction is made in 761.65(b), between the diking requirements for containers

 of liquid PCBs and containers of non-liquid PCBs.  Where the plain language is

 clear,  there is no need to go beyond the words to interpret  the regulation,

 unless  the words are at variance with the policy of the regulation as a whole.

 Estate  of Cowser v.  Commissioner of Internal  Revenue,  736 F.2d 1168, 1171
 1_2/  Not decided in this case is when the 30-day temporary storage period
 runs in the case of containers which are intermittently  filled with PCBs
 over a period of time.   Under these circumstances the 30-days could well
 run from the date PCBs  are first placed in the  container.   It is un-
 necessary to consider that question, however, because there is no evidence
 in the record to indicate either that any container  was  being filled
 gradually rather than all at once,  or that, if  it were,  it would have made
 any difference in the finding of violation.

 1_3_/  Findings of Fact Nos. 8, 13.

-14/  Finding of Fact No. 8.

 1_5/  Tr. 70, 84.

 1_6/  Complainant's Exh.  7, Attach.  4. '

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                                     13
 Requiring  diking  to  contain possible spills  of  non-liquid  as  well  as  liquid
                                                                    •
 PCBs does  not  appear to  be at variance with  the policy  of  the regulation as

 a whole.

      Finally,  both the City and SEPTA fault  the EPA  for not  giving notice

 that the containers  were improperly stored when the  EPA inspected  Suburban

 Station on September 9,  1982.  The City claims  that  it  was prejudiced by

 not  being  told at that time that its containers were illegally stored for

 if it had  been, the  necessity for this present  action could have been avoided,

      It seems clear  from the discussion which went on on September  9th, 1984,

 that the EPA inspector made known to the City's resident engineer,  Mr. Burns,

 that the storage which the inspector observed did not meet the storage re-

 quirements for containment. 17/  What was not specifically pointed  out was

 whether any of the containers observed had been stored  for longer than 30

 days.  18/  The EPA inspector apparently did not pursue  this matter  because

 the  purpose of the inspection was  not to find violations but to insure that

 the  City was familiar with the regulatory requirements. 19/  Moreover, while

 the  regulations were possibly not  as crystal  clear as they could have been,
                     .» :
 they were clear enough that the EPA inspectors  could have reasonably assumed

 that  the City understood that no container could be temporarily stored for

 more than 30-days after it was filled,  unless the City  said something to
111  See Tr. 19=20, 38, 41, 43-44,  77, 92.  Mr. Burns stated that the
dTscussion about catchpans may have taken place later (Tr. 103), but the
testimony of the EPA inspectors seems  to more accurately describe what was
-actually discussed.

18/  Tr. 44.

19/  Tr. 36.

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                                    14
 indicate  otherwise.   There  is no evidence here that the City during the
 September 9th  inspection  or before or afterwards, made known to the EPA
 that it read the  regulation in the manner respondents have urged here,
 I.e.,  that'diking or  catchpans were not required so long as the containers
 remained  on the disposal  site or the clean-up was being carried on. 20/
 The City  cannot in good faith claim that it was misled where, as appears
 to  be  the  case, it proceeded on an interpretation of the regulations that,
 for the reasons already noted was doubtful, to say the least, and without
 making any effort to clear  the matter up with the EPA.  Nor, under these
 circumstances, would the  EPA be estopped from bringing a penalty action if
 it  later found that the containers were not being stored in accordance with
 regulation requirements.
                          The Liability of SEPTA
     The clean-up in this case which  gave  rise to the  storage violation was
 done under the direction and control  of the City.  SEPTA is included in
 this proceeding as'a respondent simply  by  viture of its  being the  owner of
 Suburban Station.   These facts are not  disputed.  The  EPA claims that since
 761.65(b), states  that "owners or operators" of a facility must  comply with"
 the storage requirement, SEPTA must be  held jointly and  severally  liable
with the City  for  the  violations.   It rests  its position  on the  fact  that
 owners and operators have been held jointly  liable  under  similar wording
 in the Comprehensive Environmental  Response,  Compensation,  and Liability
 Act of 1980 ("CERCLA"),  section  107a, 42 U.S.C.  9607(a),  and'in  the Clean
 Water Act, section 311 (g)  of the  Clean  Water Act, 33 U.S.C.  1321 (g).   The
20/  Mr.  Burns  the  City's  resident  engineer did indicate that  it would  be
impractical  to  store  the drums  in a concrete  curbed area but there  is no
evidence  that the City informed the EPA that  the City did  not  intend to
use metal  catchpans.  ,

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                                     15


 cases cited under CERCLA,  however, dealt with imposing joint and several
                                                                     •
 liability on parties when  the conduct of each party was a contributing factor

 in causing the  violation.  21/  Here,  SEPTA was responsible for insuring that

 the construction  being done by the City would not endanger the passengers or

 unduly interfere  with the  operation of the trains.  22f  But it took  no part

 in the decisions  made by the City with respect to how the clean-up was done,

 and specifically  to  storing the containers without  proper containment, and

 it is problematical  to what extent SEPTA'S responsibilities gave it  any say

 in such decisions.   The City did send  copies  of  its correspondence to  the

 EPA to SEPTA, but these do not indicate that  the City had consulted  or dis-

 cussed the matters stated  therein  with SEPTA.   The  correspondence  also

 indicated that  the City was complying  with the regulatory requirements so

 that there was  no reason for SEPTA to  believe  that  there  was any need  for

 action on its part if it's  right of oversight  gave  it any authority  to

 act.  23 /   Under these  circumstances, SEPTA'S conduct  cannot be  said  to have

 been a contributing  factor  in  the  violation.   The case  of United States  v.

 M/V Big Sam, 681  F.2d  432  (5th  Cir. 1982)  under  section 311 of the Clean
                     .» :
 Water Act cited by the EPA,  at  first glance seems more  in point, since there

 the accident was  caused solely  by the  negligence of the operator of  a  tug

 which collided with.a  tanker-barge.  The operator was operating  the  tug  under

 a  bareboat charter from the  owner.  The court, however, based its  finding of

 joint liability on the  definition in the statute of "owner  or operator"  as
-217  SEE EPA's reply brief at 9.

 22/  Tr. 137-38.

 23/  See Complainant's Exh. 7, Attach.- 4.

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                                    16



 meaning any person owning, operating or chartering a vessel. 24/  It


 then  reasoned that this was intended to impose strict liability for


 recovering clean-up costs from oil  spills against  the owner and
                       •

 operator jointly, since such a construction would  be more consistent


 with the legislative intent than permitting a  vessel  owner to insulate


 itself from liability through a charter to an  impecunious and uninsured


 charterer.  M/V Big Sam, supra, 681  F.2d at 438-39.   Neither TSCA,  nor


 the PCB Ban Rule, contain any definition of "owner or operator", which


 would indicate that the statute or  regulation  was  intended to impose


 joint and several liability on owners of property  without regard to whether


 they had in anyway caused the violation.   Quite the  contrary,  to do so


 would seem inconsistent with the statutory requirement that the degree of


 the violator's culpability must be taken  into  account  in  determining the


 appropriate penalty.  25/  It would mean that an operator  who committed


 the violation  would be  allowed to plead mitigating circumstances  but the


 owner would be barred from pleading  special mitigating circumstances that


 applied to him.   Nothing either in the  statue  or regulations  indicates that


 such unequal treatment  of respondents was intended.   Nor  does  it  appear,


 as was true in the case of the Clean  Water Act, that effective  enforcement


 of the regulations requires that the  owner of  property be  held  liable  with


the operator even though the owner had  no involvement  in the  violation.


 In order to impose strict liability on  SEPTA for wrongs committed by. its


licensee,  there  must  be an indication that  Congress specifically intended
24/  See Clean  Water Act,  section 311(a)(b), 33 U.S.C. 1321(a)(6).


25/  See TSCA,  section !6(a)(2)(B), 15'U.S.C. 2615(a)(2)(B).

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                                    17
this result.  See Amoco Oil Co. v. Environmental Protection Agency, 543
543 F.2d 270 (D.C. Cir. 1976), (refusing to impose strict liability on
the lessor of a retail gasoline station for violations of the unleaded
gas regulations by the lessee).  That indication of intent by Congress,
or even by the Agency, is simply missing here.
     Accordingly, the complaint tjs dismissed against SEPTA and no penalty
is imposed.
                               The Penalty
     The EPA's proposed penalty of $45,000 is derived from the PCB Penalty
Policy issued as part of the Agency's guidelines for the assessment of civil
penalties under TSCA, section 16.  26/  Using the GPB matrix contained  there
to determine a gravity based penalty, the EPA has classified the violation
as a major storage violation (level  three under the circumstances column)
involving a major amount of non-liquid PCBs (100 or more 55-gallon drums).
The gravity based penalty for a violation of that nature is $15,000.  27/
The EPA has then multiplied this penalty by what it terms three days  of
"documented violation", namely, the  violation observed by the EPA's in-
spectors during their'informal  inspectipn on September 9th, the City's
letter of October 26, 1982 (Complainant's Exh. 7, Attachment 4) disclosing
that 450 drums had been accumulated, and the violations observed on the
March 1, 1983 inspection. 28f
     The City contends that the penalty calculation fails to comply with the
PCB Penalty Policy in that no adjustment was made for culpability, history
of violations, ability to pay,  ability to continue in business and such other
26_/  45 Fed.  Reg.  59776 (September 10,  1980).
27_/  See 45 Fed.  Reg.  at 59777.
28/  Complainant's main brief at 10. •

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                                    18
 matters as justice may  require.  The EPA correctly decided that no downward
 adjustment for any of these factors, which is presumably all the City is
 interested in, was required for the calculation of the gravity based penalty
 of $15,000".  Since the  penalty was designed to apply to first offenders, no
 downward adjustment for lack of prior violations would be merited. 29/  The
 guidelines also put the burden on-a respondent to prove inability to pay or
 inability to continue in business. 30/  This is a reasonable requirement
 since the respondent would be the one possessed of the evidence of its
 financial condition. 31/  The City did not raise the issue of ability to pay
 in its answer and did not present any financial data indicating inability to
 pay at the hearing.  So far as culpability is concerned, the guidelines would
 allow no adjustment downward where the violator had sufficient knowledge to
 recognize the hazard created by his conduct and had control  over the situation
 to avoid committing the violation.  32/  There is no question here that the
 City knew that PCBs were a highly toxic  substance.   The City was also fully
 familiar with the requirements of the regulation and had the necessary con-
 trol to provide proper storage for the drums. 33/  It was  apparently disposed,
 however, to give the.requirements a liberal interpretation so as to avoid the
 inconvenience or expense of having  to provide containment  for the drums while
 they were being stored at Suburban  Station.  The City cites  its good faith
2_9/  See 45 Fed. Reg. at 59773.
30_/  45 Fed. Reg.  at 59775.
317  See Commonwealth of Puerto Rico v.  Federal  Maritime Commission, 468
FT2d 872, 881  (D.C. Cir. 1972).
3_2/  45 Fed. Reg.  at 59773.
33_7  See Tr. 103-04, 108-09.

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                                     19

 efforts in cleaning up Suburban Station and the considerable costs incurred
                                                                     •
 in the effort. 34/  This makes even less understandable, the City's refusal

 to provide at least catchpans for the drums, particularly since the evidence

 indicates that this could have been accomplished by a simple change to the

 contract for the clean up. 35/  While the City may have honestly believed
                            1"-~l™   ^

 that it did not have to comply wi'th the storage requirements, i-ts position

 was not based on a reasonable interpretation of the regulations, especially

 since the City knew it was dealing with a highly toxic material. .Conse-

 quently, the EPA was also justified in making no downward adjustment  for

 culpability in the gravity based penalty.                         "

      A different question arises as to the tripling of the gravity based

 penalty by reason of there being'what is described as three documented

 violations.   While it  is  true that  new drums were  being added to the  group

 of improperly stored drums,  what is really involved here is a'repeated

 course  of  conduct over a  period  of  several  months.   In such cases,  multiple

 penalties  are not routinely  assessed under the  Penalty Policy but are  made

 discretionary.  36/  As I  read the  guidelines, it is not  sufficient  for the
                     .» :
 EPA to  show  that the violation persisted over a period of time.   The  EPA

 must  also  show  why in  this case  the  gravity based  penalty of $15,000 would

 not be  an  adequate penalty.   The guidelines state  that the purpose  of  the

 penalty  system  is  to assure  that TSCA civil  penalties  be assessed in a fair,
 34/   City's main brief at 3, where it points to having  spent approximately
 WOO,000 in direct costs and having incurred indirect costs in excess of
"$250,000.

 35_/   Tr. 103-04, 108-09.

 35/  45 Fed. Reg. at 59782.

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                                     20
 uniform and consistent manner, that the penalties are appropriate for
 the violation committed, that economic incentives for violating TSCA-are
 eliminated and that persons will  be deterred from committing TSCA viola
 tions. 37/  Fairness, uniformity and consistency In application where the
 penalty is discretionary depend on  the grounds  asserted for assessing
 multiple penalties.  The EPA, however, cites no ground other than that none
 of the drums of waste generated during the  clean-up were properly stored.
 The guidelines, however, recognize  that each separate act of a repeated
 course of conduct may not always  merit multiple  penalties for the viola-
 tion.  38/  Turning then to the other reasons that would dictate the need
 for multiple penalties, the principal  grounds would seem to be to insure
 that the penalty be large enough  so that economic incentives for violating
 TSCA are eliminated.   The City by its  actions here  has  demonstrated that it
 does try generally to comply with the  law.   Thus,  this  matter first came to
 the attention  of the  EPA,  because the  City  called  it  upon  discovering  that
 it had a PCB problem  at Suburban  Station. 39/ Nor  was  the City unmindful
 of its obligation to  properly  clean-up the  PCBs and dispose  of them.
 The steps the  City took to correct  the  problem were thorough so far as
 they went.   This violation occurred because  it would-appear  that  the
 necessity for  containing these drums while  stored at  the  site was not  as
 readily apparent as the dangers confronting  the construction  workers working
 in an  area  contaminated with PCBs.  Whether  or not the  City  regarded the
 storage of  drums as important  a safety consideration  as removing  PCBs  from
 the construction site,  however, is  not the  controlling  factor.   The purpose
_37/  45  Fed.  Reg. at 59770.
 38/  45  Fed.  Reg. at 59783.
 39_/  Findings of Fact Nos. 3 and 4.

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                                     21
 of the storage requirements 1s  to guard against PCBs  entering the  environ-
 ment through possible spills or accidents  while they  are 1n storage.'  The
 likelihood of spills  or accidents occurring  may seem  quite  remote,  but  the
 regulation has nevertheless made a policy  decision  as to what 1s required
 and should be complied  with.  On this  record,  it  cannot  be  determined
 whether the City would  have had £p expend  more or less than $15,000 to
 supply catchpans.   Nevertheless,  the $15,000 does seem a  large enough sum
 to substantially diminish  any economic gain  the City  might  have realized  by
 not complying,  and  to insure that  the  City will comply in the future with
 all PCB regulations.  I  find, accordingly, that the appropriate penalty is
 $15,000.
                                        40/
                                  ORDER
     Pursuant to  section 16(a) of the  Toxic  Substances Control Act, 15 U.S.C.
 2615(a), a civil penalty of $15,000 Is hereby assessed against Respondent
 The City of Philadelphia, for the violations of the Act found herein.
     Payment of the full amount of the civil  penalty assessed shall  be  made
 within  sixty  (60) days of the service of the final order upon Respondent by
                 •
 forwarding to the Reg'ional  Hearing Clerk a  cashier's check or certified
 check payable to the United States of America.
                                      Gerald Harwood
                                      Administrative Law Judge
DATEDiJ-Ufh H,
407 -Unless an appeal  is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects  to review this  decision on his  own
motion, the Initial  Decision shall  become the final  order of the
Administrator (See 40  CFR 22.27(c)).  "

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                             INITIAL DECISION


      This is a proceeding under the Toxic Substances Control Act ("TSCA"),

 section 16(a), 15 U.S.C. 2615(a)t to assess civil penalties for violation

 of a  rule promulgated under section 6(e) of the Act, 15 U.S.C.  2605(e),

 regulating the manufacture, processing, distribution in commerce, use,
                                  *•
 disposal, storage and marking of po-lychlorinated biphenyls ("PCB Ban

 Rule"), 40 C.F.R. Part 761. !_/  The administrative, complaint issued by

 EPA Region III, charged that Respondents Southeastern Pennsylvania Trans-

 portation Authority, the City of Philadelphia and Penn Central Corporation

 improperly stored PCBs removed during a PCB cleanup at Suburban Station.

 A penalty of $45,000 was requested.

     Penn Central Corporation on its unopposed motion was dismissed as a

 party to the proceeding.  Respondents the City of Philadelphia and South-

 eastern Pennslyvania Transportation Authority answered, contesting both

 the violation and the appropriateness of the proposed penalty.

     A hearing was held in Philadelphia, PA on April  3, 1984.   Thereafter

 each party submitted proposed findings  of fact, conclusions  of law and a
                     .» :
 proposed order with a supporting brief.  On consideration of the entire

 record and the submissions of the parties,  a penalty  of $15,000 is'

 assessed against  Respondent the City of Philadelphia.  The complaint  is

 dismissed  against Respondent Southeastern Pennsylvania  Transportation
I/   Section 16(a)  provides  in pertinent  part  as  follows:   "(1)  Any person
who violates a provision  of  section  15  shall be liable  to  the  United States
for a civil  penalty in an amount not to exceed $25,000  for each  such
violation.   Each day such violation  continues  shall,  for the purposes  of
this subsection, constitute  a  separate  violation  of  section 15."

     TSCA,  section  15, makes it unlawful  among other  acts,  for any  person to
"(1) fail  or refuse to comply  with  . .  .  (c) any  rule promulgated .  .  .
under section ... 6."

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 Authority.  The findings, conclusions and reasons for the assessment of



 this  penalty follow.  All proposed findings and conclusions inconsistent



 with  this decision are rejected.



                             Findings of Fact



 1.    Respondent Southeastern Pennsylvania Transportation Authority ("SEPTA")



      is a transportation authority-authorized under Article III of the



      Pennsylvania Urban Mass Transportation Law,  55 P.S. Sec.  600-301,



      et. seq.  SEPTA is the owner of Suburban Station located  at 16th Street



      and John F. Kennedy Boulevard, Philadelphia, Pennsylvania.  SEPTA has



      operated commuter rail  services into Suburban Station since January 1,



      1983.  Stipulation of the  parties,  Transcript ("Tr.") 2.



 2.    Respondent, the City of Philadelphia ("City"),  is  a city  of the first



     class located in the Commonwealth of Pennsylvania.   The City under



     a grant from the U.S. Urban Mass Transportation  Administration is



     constructing a project  known  as  the  Center City  Commuter  Connection.



     This work  involved major construction in  and the renovation of



     Suburban Station.   Tr.  136;  Stipulation,  Tr.  3.



3.   The City discovered that the  track bed and adjacent  areas  in Suburban '



     Station where the  construction and renovation work  would be  done  were



     extensively contaminated with PCBs,  apparently as a  result of PCBs



     having  leaked from train transformers  onto the track  beds  over a



     period  of  many years.   Samples taken  from various locations  in the



     work  site  showed concentrations  of PCBs ranging  from  720 ppm to



     530,000 ppm.   Complainant's Exh. 5; Complainant's Exh. 6,  p.  1;



     Complainant's  Exh.  8, Attach. A.



4.   In  March 1982,  at  the City's  request,  representatives of the  EPA met



    with  representatives of the City to discuss decontaminating  Suburban



     Station of  PCBs.   Tr. 7-9,  35.

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  5.   At the meeting, the City was told that once the PCS contamination

      was disturbed the PCBs would have to be stored, marked and disposed

      of in accordance with the PCB regulations.  A copy of the PCB regula-

      tions was given to the City.  Tr. 8-9.
                                  *•
  6.   On August 24, 1982, the EPA met  with the City to again discuss the

      decontamination of Suburban Station.  One item discussed was the

      storage of the cleaned-up PCBs until they were disposed of.   The

      EPA told the City that under the PCB regulations the temporary

      storage of PCBs without curbing  could not exceed 30 days.  2/  Tr. 18,

      72-73.

 7.   As a follow-up to the August 24th meeting,  EPA representatives,

      Christopher Pilla,  Edward Cohen  and  Roland  Shrecongost,  on September 9,

      1982, made an inspection of Suburban Station.   The inspection  had been

      arranged  with Thomas  Burns,  the  City's  resident  engineer for the

      Suburban  Station renovations, who was present  at the inspection.  Tr. 19,

      97,  107.

 8.   Mr.  Pilla  on  the'September  9  inspection  saw a  number of  drums  of PCB

      waste material  stored  on  the  platforms  in areas'which were not curbed.

      He told Mr.  Burns that  the  regulation  required that  drums stored for more

      than 30-days  must be stored in a  curbed area.  He  also suggested that as

      an alternative  to curbing the City could  use metal catchpans for contain-

      ment.  Tr.  20,  43-44,  77, 103.
 2/    See the storage for disposal requirements, 40 C.F.R. 761.65, which in
-Ihe testimony is referred to under its former numbering, 40 C.F.R. 761.42.
 Effective May 6, 1982, the PCB Ban Rule was renumbered without any substantive
 changes.  47 Fed. Reg. 19526 (May 6, 1982).  References in this opinion will
 be to the present numbering.

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 9.   On October 26, 1982, the City wrote  to  the  EPA about its.progress in
                                                                    *

     the PCB cleanup at Suburban Station. With  respect to the drums of

     PCB waste, the City stated as follows:

          Approximately 450 drums containing PCB waste were generated
          by the clean-up. . .  .  [T]hese drums  will  be expeditiously
          removed from the Station-and  transported  to SCA Services'
          hazardous waste facility in Model  City, New York for final
          disposal.  Our analysis has determined that all  the waste  can
          be considered solid for purposes of disposal.

     Complainant's Exh. 7, Attach. 4.
                                  •
 10.  On February 28, 1983, the  EPA received  a complaint from a  private

     citizen that drums of PCBs were located on  a publicly accessible train

     platform at Suburban Station (Tr.  22, 39, 53;  Complainant's  Exh.  7,  p.  1),

 11.  Mr. Pilla called Mr. Burns and arranged to  inspect Suburban  Station  on

     March 1, 1983.   On that day,  Mr. Pilla  saw  about  200  drums of PCB

     material on platform No. 3.   The area was not  curbed  andjthe drums were

     not contained in metal  catchpans.  Tr.  23, 32; Complainant's Exh. 7,

     p. 2.   .

12.  At the March 1st inspection  Mr. Pi 11 a was handed  a  letter  from  the City

     dated March 1,  1983,  stating  that  500 drums of PCB  solid waste  and

     construction debris  had been  generated  by the  cleanup  of the Station and

     were being assembled for transportation to an approved  PCB landfill.  It

     was further stated that  the  drums  were  scheduled to be  removed  from the

     Station  over the  weekend of March  12-13.  Tr.  29-30; Complainant's

     Exh.  7,  Attach. 3.                                            ;

13.  Mr.  Pilla  inspected  Suburban  Station again on  March 13, 1983.   All

     drums  of PCB  waste had been removed from the Station.  He also  in-

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                                     5
      spected the underplatform areas where the drums had been stored.
      None of these storage  areas  had any curbing nor was there evidence
      of any metal catchpans having been used.  Tr. 31. 56; Complainant's
      Exh. 7, p. 2.
 14.   The approximately 500 drums  of PCB contaminated material collected
      during the Suburban Station  cleanup were filled between May 1932 and'
      February 1983 (Tr. 43, 98-100).
 15.   SEPTA as owner of Suburban Station granted to the City a license to
      come upon the Station property to do the construction and renovation
      work for the Center City Commuter Connection project.   It was the City
      however, which obtained the  federal  grant to fund the project and
      contracted for the work to carry it  out including the  clean-up of PCBs
      at Suburban Station.  The City selected and engaged the services of the
      contractor to do the PCB clean-up and  decided what the work  would include.
      Tr. 103, 109, 133, 136-37; Stipulation,  Tr.  2-3;  Complainant's Exh.  8.

                        Discussion and Conclusions
      The specific, storage violations charged in the complaint were that drums
of PCB waste material  designated  for disposal  had been  stored in  facilities
which did not have proper curbing, and which were below the 100-year flood
water elevation.   The  charge that  the PCB drums were stored below the 100-year
flood water  elevation, however, was withdrawn  at  the beginning of the hearing. 3_/
Consequently the  only  violation remaining to  be considered  is  whether there was
a violation  of  the requirement that the drums  should have been stored in
facilities having  continuous curbing  at least  six inches high.
3/   Tr.  3-4.

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 See 40 C.F.R. 761.65(b)(l)(1i).   The  record  also  disclosed that  in  lieu  of
 continous curbing, the EPA would have accepted  the use of metal  catchpans
 as an alternative means of providing  containment.  4/  It  1s not  disputed
 that the PCB drums were not stored either  in a  facility with continuous
 curbing or on metal  catchpans.
      The EPA's position with respect  to the  violation  is  straightforward.
 There was no obligation to clean  up the PCBs on the  track  beds and  adjacent
 areas since they were  "historical" PCBs, i.e.,  had been in place  prior to
 February 17, 1978, the  date of publication of the  original  PCB Disposal  and
 Marking Rule. 5/  Each  container  of PCBs resulting from the clean up, however,
 and stored for disposal, according to 40 C.F.R. 761.60(a)(6) and  (c)(3), must
 be stored in a facility that complies with 761.65(b),  unless it  is  "temporarily1
 stored for no more than 30 days from the date of its removal from service.
      The City's  position appears  to be that  the governing  date for  the storage
 requirements is  when the clean-up was completed and  all the  PCB filled drums
 were removed from the decontamination site for a shipment  to a disposal  site.
 It relies  upon a  note"-placed as a preamble to the  storage  and disposal regu-
 lations under Subpart D which reads in pertinent part  as follows:
                 NOTE:   This Subpart [D] does not require removal
                 of PCBs  and PCB Items from service and  dis-
                 posal earlier than would normally be the case.
                 However, when PCBs and PCB Items are removed
                 from service and disposed of, disposal  must be
                 undertaken  in accordance with these  regulations.
                 PCBs (including'soils and debris) and PCB  Items
.£/   Findings of Fact No. 9, supra.
 5/   See 43 Fed. Reg. 7150.  The disposal  and marking requirements were
 subsequently incorporated into the final  PCB Ban Rule.  See 44 Fed. Reg.
 31514 (May 31, 1979).

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                 which have  been  placed in a disposal  site are.
                 considered  to  be  "in  service"  for purposes of
                 the  applicability of  this subpart.  This sub-
                 part does not  require PCBs  and PCS Items land-
                 filled, prior to  February  17, 1978 to  be removed
                 for  disposal.  However, if  such PCBs  or PCB
                 Items are removed from the  disposal site, they
                 must be disposed  of in  accordance with  this
                 subpart. *  * *

      The City  argues that the  decontamination  site at Suburban Station is

 a "disposal site" under the definition  of "disposal"  in the PCB Ban Rule

 (40 C.F.R.  761.3(b)).   Accordingly, the City claims that as long as the

 PCB filled  drums remained on the  decontamination  site they were considered

 to be in service and not subject  to the storage for disposal requirements.

 Such an  interpretation  rests upon  reading considerably  more into the note

 than is  justified by its wording.

      For purposes of this decision it can be assumed  that the decontami-

 nation site is a "disposal  site" within the meaning of  the  note.  The

 language in the note  referring to the removal  of  PCBs "from service",

 however,  can also refer to the cleaning up of  the  PCBs  by  scraping, de-

 greasing, washing, etc. from the  surfaces where they  had  been deposited.  6/
                     •^ "                                                  ^^
 In  fact,  this would  be the most obvious way to  read the note.   It would seem

 that PCBs are usually placed in a disposal site to be permanently disposed

"of  there.  Under the note,  then,  they would be considered to remain in

 service  as long as they were undisturbed.  In  any  event,  the lack of merit

 in  the City's argument is demonstrated by the  fact that under  the City's
 6/   The parties themselves characterize the cleaning up of the PCBs as
 the removal of PCBs.  See Complainant's Exh. 7, Attachment 2, where the
-City in writing to the EPA in October 1982, says, "[the contractor] has
 recently successfully completed its clean-up efforts at the Station.  In
 the areas that were cleaned, 95-99 percent of the PCBs that were present
 have been removed."  The "removal" referred to was obviously to the clean-
 up of the PCB material itself and not to the shipment of the drums, since
 the drums were still being stored at the station.

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                                    8


 interpretation the  PCB drums could have been stored indefinitely at the
                                                                    •
 site, which  would have been tantamount to permitting their disposal at

 other than at an EPA approved facility.  The City, however, never questioned

 that the  drums had  to be eventually disposed of at an EPA approved facility. TJ

      I find, accordingly, that the storage requirements became applicable once

 the PCBs  were removed by scraping, degreasing, washing, etc. from the surfaces

 where they lay. 8/

      Section 761.65(c)(l) of the regulations, however, permits the temporary

 storage of certain  PCB items for up to 30 days without complying with the

 storage requirements, provided that there is attached to the item a notation

 indicating the date it was removed from service.   The pertinent language is

 as  follows:

                       (c)(l)  The following  PCB Items may be
                       stored  temporarily in an area  that does
                       not comply with the requirements of
                       paragraph (b)  of this section  for up to
                       thirty  days from the  date  of their re-
                       moval from service, provided that a
                       notation is attached  to the PCB Item or
                       a  PCB Container (containing the item)
                       indicating the  date the item was removed
                       from service:
                         (i) Non-leaking PCB Articles and PCB
                       Equipment;                 • •
                         (ii)  Leaking  PCB Articles and PCB
                       Equipment if the PCB  Items  are placed  in
                       a  non-leaking PCB Container that contains-
                       sufficient sorbent  materials to absorb any
                       liquid  PCBs remaining in the PCB Items;
TJ   Although the City first considered entombment of the  PCBs  at  a  specially
constructed facility at the Station, it finally decided against this,
apparently because of the difficulty of obtaining EPA approval  of  the  pro-
cedure.  Tr.-71-72.

8/   The clearest application of  the note would be to the  obligation to  re-
Fispose of PCBs which had been disposed of prior to the publication  of the
PCB regulations.  A study of the  legislative history of the  note indicates
that the language of the note relied on by the City had its  origin in  just
such a situation.  See 43 Fed. Reg.  -33918-919 (August 2,  1978).

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                         (ill) PCB Containers containing non-
                       liquid PCBs such as contaminated soil,
                       rags, and debris; and
                         (iv) PCB Containers containing liquid
                       PCBs at a concentration between 50 and
                       500 ppm, provided a Spill Prevention,
                       Control and Countermeasure Plan has been
                       prepared fj*r the temporary storage area in
                       accordance'with 40 CFR Part 112.  In
                       addition, each container must bear a
                       notation that indicates that the liquid in
                       the drum do not exceed 500 ppm PCB.
     It is  to be noted that the temporary storage permitted is for the
 PCB containers filled with the PCB material  rather than for the material
 itself.  It is assumed, however, or at least no one has argued to the
 contrary, that in cleaning up PCBs, the PCB material, as part of the
 clean-up, can be put into containers with the containers then becoming
 subject to the 30-day temporary storage rule.
     SEPTA argues that the regulation in speaking of removal  from service
 uses terms appropriate to a group of containers, i.e.,  "their removal from
 service", and that,  therefore,  it was intended that where a number of con-
 tainers are filled in a clean-up which continues over a period of time, the..
 30-day storage period starts to run from the date the last container is
 filled.  Under this  construction there would have been  no violation since.
 the containers were-shipped for disposal  within 30-days after the last
 container was filled.  The  logical  reading,  however,  is that  the  plural
 "their" in the phase "their removal  from service" simply refers generally
to the  several  different  kinds  of PCB items,  PCB containers being only one
such item,  for which temporary  storage is  permitted,  and that that particular
provision  was not intended  to deal  with  determining the date  on which any
particular item was  removed from service.

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                                    10
      SEPTA'S  interpretation is also questionable because the result of
 permitting the  storage  of  containers in a substandard storage area for 8
 to 10 months, seems totally inconsistent with the entire thrust of the regu-
 lation which  is  to limit temporary storage to 30-days.  This is even more
 apparent when one examines the legislative history of the regulation.
      The original marking  and disposal rule permitted the temporary storage
 only  of PCB articles and equipment if they were non-leaking or in non-
 leaking containers. _9_/  PCB articles and equipment are manufactured items
 other than containers such as transformers,  or capacitors or electric
 equipment. 10/  When the PCB Ban Rule was issued, the regulation was amended
 to permit the temporary storage of PCB containers of non-liquid wastes and
 of liquids with low concentrations (50-500 ppm) of PCBS.  With respect to
 containers of non-liquid wastes, it was explained that their temporary storage
 was permitted because such containers do not pose any greater hazard than
 non-leaking containers of leaking articles.  11/  With an article like a
                                          i
 transformer or capacitor there would usually be no question of the date when
 it is  removed from service, the word service being given its normal  meaning"
 of being in-use.  This appears to be the meaning that "service"  also has
 in the  phrase "in service"  in  the preamble to Subpart D.  It is  obvious,
9/  Marking and disposal  rule,  section  761.42(c)(l),  43  Fed.  Reg.  7162
jFebruary 17, 1978), as amended by 43 Fed.  Reg". 33198 (August 2, 1978).
Section 761.42 along with the other provisions of  the marking and  disposal
rule was incorporated with modifications and  amendments  into  the PCB  Ban
Rule.  Supra, n 5.  Section 761.42 was  redesignated 761.65  at 47 Fed.  Reg.
19527 (T9H2J.
10/  Marking and disposal  rule, sections 761.2(r),(v), 43 Fed.  Reg. at
7T57.  These definitions  are now found  in 761.3(t), (w).
ll/  44 Fed. Reg.  31523-524 (May 31, 1979).

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                                    11
 however, that the words  "in service" cannot be used in the same sense

 when  applied to the subsequently added containers of contaminated soil

 and debris.  The reasonable interpretation is that the 30-day period is
                      ,                          >
 to be determined by reference to the date the container is filled with
                                 v i
 soil  and debris, and SEPTA'S argument, in fact, assumes as much.  Where

 SEPTA'S argument fails is in attempting to give the words "in service" a

 technical meaning that would prolong the period beyond 30-days for individual

 containers because the clean-up took several  months.  No reason appears and

 none  is offered by SEPTA as to why each container of the 500 ultimately used

 to hold all of the clean-up material, once it was filled, could not within

 30-days either have been placed in  a proper storage facility or shipped for

 disposal.  Such treatment would have been clearly within the intendment of the

 rule, as expressed in  the legislative history,  that no PCB item (i.e.,  the

 filled container)  could be temporarily stored for more than 30 days.   On the
                                     \
 other hand, under SEPTA'S interpretation,  the risk of  of potential  harm created

 by having PCBs  stored  in substandard facilities would  be increased by allowing
                    .'' •   •
the temporary  storage  of containers  for several  months,  a  result plainly

 contrary to what was intended  by the regulation.

      I find, accordingly, that  each  container containing PCBs  generated by

the clean-up, could be temporarily stored  for only 30-days from the date it

was filled  with  PCBs.   A container stored  for a  longer  period  had  to  be

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                                    12


 stored  in an area meeting the requirements of 761.65(b). 12/  .The record
                                                         ^^^™"         •
 shows that  containers filled with PCBs from the clean-up were stored  for more

 than 30-days in areas that were not curbed as required by 761.65(b)(ii). 13/

 Nor were such containers placed on metal catchpans, which would have  been

 an acceptable alternative to curbi/ig. 14/

      It is  also argued by SEPTA that curbing is required only if liquid wastes

 are being stored, and none of the containers contained liquids.  The  EPA

.takes issue with SEPTA's characterization of its wastes as non-liquid, citing

 the testimony of Mr. Shrecongost that some of the containers may have held

 sludge  which he described as "solid, fairly wet material." 15/  All waste

 generated in the clean-up, however, appears to have been sufficiently solid

 in nature that it could be disposed of as solid waste. 16/  In any event, no

 distinction is made in 761.65(b), between the diking requirements for containers

 of liquid PCBs and containers of non-liquid PCBs.  Where the plain language is

 clear,  there is no need to go beyond the words to interpret  the regulation,

 unless  the words are at variance with the policy of the regulation as a whole.

 Estate  of Cowser v. Commissioner of Internal  Revenue,  736 F.2d 1168, 1171
 12/  Not decided in this case is when the 30-day temporary storage period
 runs in the case of containers which are intermittently filled with PCBs
 over a period of time.   Under these circumstances the 30-days could well
 run from the date PCBs  are first placed in the  container.   It is  un-
 necessary to consider that question, however, because there is no evidence
 in the record to indicate either that any container  was being filled
 gradually rather than all at once,  or that, if  it were, it would  have made
 any difference in the finding of violation.

 1_3/  Findings of Fact Nos. 8, 13.

-W  Finding of Fact No.  8.

!§/  Tr. 70, 84.

 16/  Complainant's Exh.  7, Attach.  4."'

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                                     13
 Requiring diking to contain  possible  spills  of  non-liquid as  well  as  liquid
                                                                    •
 PCBs does not  appear to  be at  variance  with  the policy of the regulation  as

 a whole.

      Finally,  both  the City  and  SEPTA fault  the EPA for not giving notice

 that the  containers were improperly stored when the EPA inspected  Suburban

 Station on September 9,  1982.  The City claims  that it was prejudiced by

 not  being told at that time  that its  containers were illegally stored for

 if it had been,  the necessity  for this present  action  could have been avoided.

      It seems clear from the discussion which went  on  on  September  9th, 1984,

 that the  EPA inspector made  known to  the City's resident  engineer,  Mr. Burns,

 that the  storage which the inspector  observed did not  meet  the storage re-

 quirements  for containment.  17/  What was not specifically  pointed  out was

 whether any of the  containers observed had been  stored  for  longer than 30

 days.  18/ The EPA  inspector apparently did not  pursue  this matter  because

 the  purpose of the  inspection was not to find violations  but to insure that

 the  City  was familiar with the regulatory requirements. 19_/  Moreover, while

 the  regulations were possibly not as crystal  clear as they could have been,
                     .» :
 they were clear enough that the EPA inspectors  could have  reasonably assumed

 that the  City understood that no container could be temporarily stored for

 more than 30-days after  it was filled, unless the City  said something to
 17/  See Tr. 19=20, 38, 41, 43-44, 77, 92.  Mr. Burns stated that the
 dTscussion about catchpans may have taken place later (Tr. 103), but the
 testimony of the EPA inspectors seems to more accurately describe what was
-actually discussed.

 18/  Tr. 44.

 19/  Tr. 36.

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                                    14
 indicate  otherwise.  There is no evidence here that the City during the
 September 9th  inspection or before or afterwards, made known to the EPA
 that  it read the regulation in the manner respondents have urged here,
 I.e.,  that diking or catchpans were not required so long as the containers
 remained  on the disposal site or the clean-up was being carried on. 207
 The City  cannot in good faith claim that it was misled where, as appears
 to be  the case, it proceeded on an interpretation of the regulations that,
 for the reasons already noted was doubtful, to say the least, and without
 making any effort to clear the matter up with the EPA.  Nor, under these
 circumstances, would the EPA be estopped from bringing a penalty action if
 it later found that the containers were not being stored in accordance with
 regulation requirements.
                          The Liability of SEPTA
     The clean-up in this case which gave rise to the storage violation was
 done under the direction and control  of the City.  SEPTA is included in
 this proceeding as  a respondent simply by viture of its  being the owner of
 Suburban Station.   These facts are not disputed.  The EPA claims that since
 761.65(b), states that'"owners or operators" of a facility must  comply with'
 the storage requirement, SEPTA must be held jointly and  severally liable
 with the City for the violations.   It  rests  its position  on the  fact  that
 owners and operators have been held jointly  liable  under  similar wording
 in the Comprehensive Environmental  Response,  Compensation,  and Liability
 Act of 1980 ("CERCLA"),  section  107a,  42 U.S.C.  9607(a),  and'in  the Clean
 Water Act, section 311(g)  of the  Clean Water Act, 33  U.S.C. 1321 (g).   The
20/  Mr.  Burns  the  City's  resident engineer did indicate that  it would  be
impractical  to  store  the drums in a concrete curbed area but there  is no
evidence  that the City informed the EPA that the City did not  intend to
use metal  catchpans.  ,

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                                     15



 cases cited under CERCLA,  however, dealt with imposing joint and several
                                                                     •
 liability on parties when  the conduct of each party was a contributing factor


 in causing the  violation.  21/  Here,  SEPTA was responsible for  insuring that


 the construction  being  done by the City would not endanger the  passengers or

 unduly interfere  with the  operation of the trains.  22/  But it  took  no part


 in the decisions  made by the City with respect to how the clean-up was done,

 and specifically  to  storing the  containers without  proper containment, and

 it is problematical  to  what extent SEPTA'S responsibilities gave it  any say


 in such decisions.   The City did send  copies  of its correspondence to  the


 EPA to SEPTA, but these do not  indicate that  the City had consulted  or dis-

 cussed the  matters stated  therein  with  SEPTA.   The  correspondence  also


 indicated that  the City was complying  with the regulatory requirements so


 that there  was  no reason for SEPTA to  believe  that  there  was any need  for

 action on its part if it's  right of oversight  gave  it  any authority  to


 act.  23/ Under these circumstances, SEPTA'S conduct cannot be  said  to have


 been a contributing  factor  in the  violation.   The case  of United States  v.

 M/V Big  Sam, 681  F.2d 432  (5th Cir. 1982)  under  section 311 of the Clean
                     .» =                  .
 Water Act cited by the  EPA,  at first glance seems more  in  point, since there


 the accident was  caused solely by the negligence of the operator of  a  tug

 which collided with.a tanker-barge.  The operator was operating the  tug  under


 a  bareboat charter from the  owner.  The court, however, based its  finding of


 joint liability on the  definition in the statute of "owner or operator" as
-2\J  SEE EPA's reply brief at 9.

 22/  Tr. 137-38.


 237  See Complainant's Exh. 7, Attach.- 4.

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                                    16



 meaning any person owning, operating or chartering  a vessel.  24/  It
                                                             ^™^™"     m

 then  reasoned that this was intended to impose strict liability for


 recovering clean-up costs from oil  spills  against the owner and
                       •

 operator jointly, since such a construction would be more consistent


 with the legislative intent than permitting a  vessel  owner to insulate


 itself from liability through a charter to an  impecunious and uninsured


 charterer.  M/V Big Sam, supra. 681  F.2d at 438-39.   Neither  TSCA,  nor


 the PCB Ban Rule, contain any definition of "owner  or operator",  which


 would indicate that the statute or  regulation  was intended to impose


 joint and several liability on owners  of property without regard  to whether


 they had in anyway caused the violation.   Quite the  contrary,  to  do so


 would seem inconsistent with the statutory requirement that the degree of


 the violator's culpability must be taken into  account in  determining the


 appropriate penalty.  25/  It would mean that an operator  who  committed


 the violation  would be  allowed to plead mitigating circumstances  but the


 owner would be barred from pleading  special mitigating circumstances that


 applied to him.   Nothing either in the  statue  or regulations  indicates that


 such unequal  treatment  of respondents was  intended.   Nor  does  it  appear,


 as was true in the case of the Clean Water Act, that effective enforcement.


 of the regulations requires that the owner of  property be  held liable  with


the operator even though the  owner had  no  involvement in the violation.


 In order to impose strict liability on  SEPTA for wrongs committed by. its


licensee,  there must  be an  indication that  Congress specifically intended
24/  See Clean  Water Act. section 311(a)(b), 33 U.S.C. 1321(a)(6).


25/  See TSCA,  section 16(a)(2)(B), 15'U.S.C. 2615(a)(2)(B).

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                                    17
this result.  See Amoco Oil  Co. v.  Environmental  Protection Agency,  543
543 F.2d 270 (D.C. Cir. 1976), (refusing to impose strict liability  pn
the lessor of a retail  gasoline station  for violations  of the  unleaded
gas regulations by the lessee).  That indication  of intent by  Congress,
or even by the Agency,  is simply missing here.
     Accordingly, the complaint i£  dismissed against SEPTA and no penalty
is imposed.
                               The  Penalty
     The EPA's proposed penalty of  $45,000 is derived from the PCB Penalty
Policy issued as part of the Agency's guidelines  for the  assessment  of civil
penalties under TSCA, section 16. 26/ Using the  GPB matrix contained there.
to determine a gravity  based penalty, the EPA has classified the  violation
as a major storage violation (level  three under the circumstances column)
involving a major amount of  non-liquid PCBs (100  or more  55-gallon drums).
The gravity based penalty for a violation of that nature  is $15,000. 27/
The EPA has then multiplied  this penalty by what  it terms three days of
"documented violation", namely, the  violation observed  by the  EPA's  in-
spectors during their'informal  inspectipn on September  9th, the City's
letter of October 26, 1982 (Complainant's Exh. 7, Attachment 4) disclosing
that 450 drums had been accumulated,  and the violations observed  on  the
March 1, 1983 inspection. 28/
     The City contends  that  the penalty  calculation fails to comply  with the
PCB Penalty Policy in that no adjustment was made for culpability, history
of violations, ability  to pay,  ability to continue in business and such other
26/  45 Fed.  Reg.  59776 (September  10,  1980).
27/  See 45 Fed.  Reg.  at 59777.
28/  Complainant's main brief at  10.-

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                                    18
 matters as justice may  require.  The EPA correctly decided that no downward
 adjustment for any of these factors, which is presumably all the City 1s
 interested in, was required for the calculation of the gravity based penalty
 of  $15,000".  Since the  penalty was designed to apply to first offenders, no
 downward adjustment for lack of prior violations would be merited. 29/  The
 guidelines also put the burden on-a respondent to prove inability to pay or
 inability to continue in business. 30/  This is a reasonable requirement
 since the respondent would be the one possessed of the evidence of its
 financial condition. 31/  The City did not raise the issue of ability to pay
 in  its answer and did not present any financial data indicating inability to
 pay at the hearing.  So far as culpability is concerned, the guidelines would
 allow no adjustment downward where the violator had sufficient knowledge to
 recognize the hazard created by his conduct and had control  over the situation
 to avoid committing the violation. 32/  There is no question here that the
 City knew that PCBs were a highly toxic substance.   The City was also fully
 familiar with the requirements of the regulation and had the necessary con-
 trol to provide proper storage for the drums. 33/  It was apparently disposed,
 however, to give the .requirements a liberal interpretation so as to avoid the
 inconvenience or expense of having to provide containment for the drums while
 they were being stored at Suburban Station.  The City cites  its good faith
23J  See 45 Fed. Reg. at 59773.
30/  45 Fed. Reg. at 59775.
31/  See Commonwealth of Puerto Rico v.  Federal  Maritime Commission,  468
FT2d 872, 881  (D.C. Cir. 197Z).
3_2/  45 Fed. Reg. at 59773.
33_/  See Tr. 103-04, 108-09.

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                                     19

 efforts in cleaning up Suburban Station and the considerable costs incurred

 in the effort. 34/  This makes even less understandable, the City's refusal

 to provide at least catchpans for the drums, particularly since the evidence

 indicates that this could have been accomplished by a simple change to the

 contract for the clea.n up. 35/  While the City may have honestly believed
                             ""   ^*.
 that it did not have to comply wi'th the storage requirements, its position

 was not based on a reasonable interpretation of the regulations, especially

 since the City knew it was dealing with a highly toxic material. .Conse-

 quently, the EPA was also justified in making no downward adjustment  for

 culpability in the gravity based penalty.

      A different question arises as to the tripling of the gravity  based    '.

 penalty by reason of there being'what  is described as  three documented

 violations.   While it is  true that  new drums were being added to the  group

 of improperly stored drums,  what is really involved here is a-repeated

 course  of  conduct  over a  period  of  several  months.   In such cases,  multiple

 penalties  are not  routinely  assessed under the  Penalty Policy but are  made

 discretionary.  36/  As I  read the  guidelines, it  is  not  sufficient  for the
                     .» :
 EPA to  show  that the violation persisted over a period of time.   The  EPA

 must  also  show  why in  this case  the  gravity based  penalty of $15,000 would

 not be  an  adequate penalty.   The guidelines, state  that the purpose  of  the

 penalty  system  is  to  assure  that TSCA  civil  penalties  be  assessed in a fair,
 34/  City's main brief at 3, where it points to having  spent approximately
 1900,000 in direct costs and having incurred indirect costs in excess of
'$250,000.

 3_5/  Tr. 103-04, 108-09.

 35/  45 Fed. Reg. at 59782.

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                                     20
 uniform and consistent manner, that the penalties are appropriate for
 the violation committed, that economic incentives for violating TSCA-are
 eliminated and that persons will  be deterred from committing TSCA viola
 tions. 37/'  Fairness, uniformity and consistency 1n application where the
 penalty is discretionary depend on the grounds  asserted for assessing
 multiple penalties.  The EPA, however, cites no ground other than that none
 of the drums of waste generated during the  clean-up were properly stored.
 The guidelines, however, recognize that each separate act of a repeated
 course of conduct may not always  merit multiple penalties for the viola-
 tion. 38/  Turning then to the other reasons that would dictate the need
 for multiple penalties, the principal  grounds would seem to be to insure
 that the penalty be large enough  so that  economic incentives for violating
 TSCA are eliminated.   The City by its  actions here has  demonstrated that it
 does try generally to comply with the  law.   Thus,  this  matter first came to
 the attention  of the  EPA, because the  City  called  it  upon discovering that
 it had a PCB problem  at Suburban  Station. 39/  Nor was  the City unmindful
 of its obligation to  properly  clean-up  the  PCBs and dispose  of them.
 The steps the  City took to correct the  problem  were thorough so far as
 they went.   This violation occurred because  it  would-appear  that  the
 necessity for  containing these  drums while  stored  at  the  site was not as
 readily apparent as the dangers confronting  the construction  workers  working
 in an area contaminated with PCBs.  Whether  or  not the  City  regarded  the
 storage of drums as important a safety consideration  as removing  PCBs  from
 the construction site,  however, is not the controlling  factor.   The purpose
_37/  45  Fed.  Reg.  at  59770.
 38/  45  Fed.  Reg.  at  59783.
 39/  Findings of Fact Nos. 3 and 4.

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                                     21
 of the storage  requirements  1s to  guard against  PCBs  entering the  environ-
 ment through possible spills or  accidents  while  they  are  1n  storage.*  The
 likelihood  of spills  or  accidents  occurring may  seem  quite remote,  but the
 regulation  has  nevertheless  made a policy  decision as to  what 1s required
 and should  be. complied with.  On this record, it cannot be determined
 whether the City would have  had  tp expend  more or less than  $15,000 to
 supply catchpans.  Nevertheless, the $15,000 does seem a  large enough sum
 to substantially diminish any economic gain the City  might have realized  by
 not complying,  and to insure that the City will comply in the future with
 all PCB regulations.  I  find, accordingly, that the appropriate penalty is
 $15,000.
                                        40/
                                  ORDER
     Pursuant to section 16(a) of the Toxic Substances Control  Act, 15 U.S.C.
 2615(a), a civil penalty of $15,000 is hereby assessed against  Respondent
 The City of Philadelphia, for the violations of the Act found herein.
     Payment of the full  amount of the civil  penalty assessed shall be made
 within  sixty (60) days of the service of the final  order upon Respondent  by
 forwarding to the Reg'ional  Hearing Clerk a  cashier's check or certified
 check  payable to the United States of America.
DATED:
                                      Gerald Harwood
                                      Administrative Law Judge
40/ -Unless an appeal  is taken pursuant  to section 22.30 of the rules  of
practice or the Administrator elects  to  review this decision on his  own
motion, the Initial  Decision shall  become  the final order of the
Administrator (See 40  CFR 22.27(c)). "

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35

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               UNITED STATES  ENVIRONMENTAL  PROTECTION  AGENCY      (-y r

                          BEFORE THE ADMINISTRATOR                   '  '°/p
In the Matter of

Robert Ross  & Sons,  Inc.,
Docket No.  TSCA-V-C-008
                                              Application for Attorneys'
                                              Fees and  Expenses Under the
                                              Equal Access to Justice Act
                           Recommended Decision



     This proceeding arises from an application by Robert Ross & Sons,

 Inc.A/   for attorneys' fees and expenses under the Equal Access to

 Justice Act (5 U.S.C. § 504).  The application results from a complaint,

 issued.by the Director of the Enforcement Division, U.S.  .Environmental

 Protection Agency, Region V on March 31,  1980, charging Robert Ross &

 Sons, Inc., hereinafter Ross or applicant,  with violations of the Toxic

 Substances Control Act (15 U.S.C. § 2601  et seq.).  Following a hearing

 in Chicago, Illinois •'during the period September 22 - 24, 1981, the ALJ

 issued an initial  decision on February 1, 1982, dismissing the complaint

 for the reason that Complainant had not shown that Ross had improperly

 disposed of PCBs as charged.  Complainant appealed the dismissal  in part

 and in a final  decision,  dated April  4, 1984 (TSCA Appeal  No.  82-4),  the

 Judicial Officer affirmed the dismissal.   Ross filed an application for
     I/  The application reflects  that  effective December 1,  1981,  Robert
Ross & Sons, Inc.  was  reorganized  into  four  separate  corporations.

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 attorneys' fees and expenses on March 2, 1982, and an amended application


 on May  2,. 1984, EPA having in the meantime promulgated regulations  (40 CFR


 Part  17)  implementing the Act.  The application was referred to the ALJ


 for preparation of a recommended decision by an order from the Judicial


 Officer,  dated July 19, 1984.


      Although the applicant originally requested a hearing on the appli-


 cation, that request was withdrawn by a  letter to the ALJ, dated August 16,


 1984.   Based on the record as presently  constituted,  I find that the


 following facts are established:^/



                             Findings of Fact



 1.    The complaint, issued on March 31,  1980, charged Ross with  improper


     disposal (incineration)  of PCBs of  greater than  500  ppm,  to-wit 4400


     ppm and 760 ppm,  in violation of §  6 of  TSCA and 40  CFR 761.10 (1979).


     Ross was also charged with improper disposal  of  PCB  laden waste oils


     in concentrations  of  67.3  ppm in violation  of  §  6 of  the  Act  and 40


     CFR 761.10.
                     ." .

 2.   Samples  upon  which  the  first  charge  of improper  disposal  was  based


     were drawn  from an  80,000-gallon  tank (SOI)  and  from  a  17,000-gallon


     tank (503)  at the time-of  an  inspection  of  the Ross  facility  conducted


     by representatives  of EPA  on  July 10, 1979.  The  sample (S28)  upon


     which the  second charge  of  improper  disposal was  based was  drawn  from


     an  excavated  area at the facility referred to as the  "mixing  pit" at


     the time of an inspection  on  November 5,  1979.
     2J  Findings  are  based on the initial decision unless otherwise
indicated.

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 3.    EPA's  Central Regional  Laboratory  (CRL) analyzed the samples utilizing

      gas chromatography with electron capture detection (GCEC) and reported

      PCB concentrations of 4400 ppm in sample SOI, 760 ppm in sample 503

      and 67.3 ppm in sample  S28.  CRL reported a PCB concentration of 95

      ppm on a second sample  (508) drawn from the 80,000-gallon tank

      during the inspection on July 10, 1979.  This sample  was not used

      as a basis for a charge against Ross.

 4.    The contents of the 80,000-gallon tank were incinerated  some-time

      during the period July 10 to October 2, 1979.  Complainant did not

      present any evidence at the hearing that the contents of the 17,000-

      gallon tank were disposed of in a similar fashion.  Likewise,

      Complainant did not present any evidence at the  hearing  as to the

     disposition of the material found in the mixing  pit on November 5,

      1979.

 5.    Analysis of a sample drawn from the 17,000-galIon tank by representa-

     tives  of the Ohio EPA on October 2,  1979,  revealed a  PCB concentration

     of 11.89 ppm.  Analyses by Environmental  Research Group,  Inc.,  a
                    .* :   •                                                 "'
     .testing and consulting  firm employed  by Ross, of what purported to be

     duplicates  of sample S28 drawn  from  the mixing pit on November  5,

     1979,  revealed  PCB  concentrations of  10 and  15 ppm.

6.   The Ross  incinerator did not  comply  with Annex I, 40 CFR  761.40 (1979).

7.   The instrument  utilized  by  CRL to test  for the presence of  PCBs

     (GCEC)  produces  a strip-chart recording referred to as a  chromatogram.

     Identification of PCBs  is made by comparing the chromatogram  of the

     sample  with chromatograms of PCB  standards.   PCB concentration is

     determined  by use of  a  formula involving the concentration of the

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     standard times the area  of  the  sample divided  by the  area  of  the
                          »                                         •

     standard times the final  volume of  the  diluted sample divided by the


     weight of the sample.  Although these calculations are normally


     made by a computer,  there are instances wherein the calculations


     are performed manually.


8.   In order to conduct' the  tests,  it is necessary to dilute the  portion


     of the sample injected into the chromatograph  and this dilution  must


    .be recognized in  calculating PCB concentrations.  Computer printouts


     of CRL calculations  on samples  SOI and S03 are in terms of micrograms


     per liter or parts per billion  (ug/1) and it is necessary to  divide


     by 1,000 in  order to convert to  parts per million.  The printout


     for sample SOI  reflects a PCB concentration of 4377.56 ug/1.


9.   Ross  denied  the alleged violations, contending, inter alia, that


     the samples  were not representative and that the tests we're


     improperly conducted.


10.   In dismissing the complaint, the ALJ found, inter alia, that  sample


     SOI from the.80,000-gallon tank  was  only a "grab sample"  and not


     representative of the contents of the tank and that there was no


     evidence indicating  the PCB concentration  of any portion  of the


    waste  at  the time of incineration.   Because there was  no  evidence


    of the dilution of Ross'  waste to reduce PCB concentrations below


    50 ppm  (40. CFR 761.l(b))  or of the  addition thereto of PCBs in


    concentrations of 500 ppm or greater (40 CFR 761.10(g)(ii)),  it was


    concluded that these provisions  of  the  regulations  were not


    applicable.  Although Complainant did not  explain  how  the  PCB


    concentration of 4377.56  ug/1  shown  on the computer  printout  for

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     sample SOI (finding 8) became the reported result of 4400 ppm,  Ross1

     expert was apparently able to duplicate this result  from  an  examination

     of the CRL file and the ALJ concluded that Ross had  not established

     its contention that the test on this sample was improperly conducted

     or calculated.

11." The ALJ found that  wastes  present in the 17,000-gallon tank  on  July 10,

     1979,  were the same wastes in the tank  on October 2,  1979, and  that

     Complainant had not established its  contention  that  the contents  of

     that tank  had been  incinerated or otherwise improperly disposed of

     during that period  as charged.  Regarding sample S28 collected  from

     the mixing pit on November 5,  1979,  the ALJ found that Complainant

     had not established by a preponderance  of the evidence that  this

     sample contained PCBs  in excess  of 50 ppm as charged.  Moreover, he

     found  that there was  no  evidence as  to  the disposition of the waste

     present  in the mixing, pit  on  November 5,  1979.

12.   Complainant appealed  the ALJ's  decision  only as  to the sample referred

     to  as  SOI.   Respondent, although  agreeing  that the dismissal  was
                    .? :
    .proper,  filed  a protective appeal as to  that part  of the decision

     holding  test  results had not been shown  to  have  been improperly

     conducted  or  calculated.   The  Judicial Officer held that even though

     the  sample  was  not  representative, it, nevertheless,  had probative

     value, but  sustained the dismissal for the  reason that Complainant

     has  failed to  prove that the sample in question contained  PCBs in

     excess of  50 ppm (Final Decision, TSCA Appeal No. 82-4,  April 4,

     1984).    He  reached  this conclusion, because the computer printout

     showing  PCB concentrations  in sample SOI  (finding 8)  reported

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     results in terms of micrograms  per liter or parts per billion and

     dividing the reported figure (4377.56)  by 1,000 would result in a

     PCB concentration of only 4.4 ppm.   It  was concluded that  Complainant

     had not sustained its burden of  proving the violation charged.

 13.  Ross filed an initial application  for attorneys'  fees and  expenses

     under the Equal  Access  to Justice  Act (EAJA or  Act)  (5 U.S.C.  504)

     on March 2, 1982, within  30  days of  the receipt of the ALJ's decision.

     At the time,  EPA had not  promulgated regulations  implementing  the Act.

     The application  requested a  total  of $69,672.35,  consisting  of

     $43,181.25 in attorneys'  fees (575.75 hours  at  the rate of $75.00 per

     hour), $24,237 in fees  and expenses for expert  witness and the

     balance of $2,254.10 in miscellaneous fees  and  expenses.

 14.  Subsequent to the final decision, Ross  submitted  an  amended  applica-

     tion for fees and expenses pursuant to  the  EAJA (letter -to Judicial

     Officer, dated May 2, 1984).  The amended application  reflected  an

     additional  119.5 hours at  $75 an hour expended  in perfecting and

     supporting Ross"  appeal and  opposing Complainant's appeal, making a
                    .' :                    •                                ""
     revised total  of $52,143.75 claimed for attorneys' fees.  Amounts

     claimed for expert  witnesses and miscellaneous  fees and expenses

     remained the  same.                                _

15.  The itemized  statement from Ross1 expert Henry  R. Friedberg &

     Associates  reflects  13.5 hours  at $45.00 an hour spent on this matter

     in 1979, 68 hours at $54.00 an  hour in  1980 and 140.5 hours at $54.00

     an hour in  1981  for  a total of  $11,866.50.  Mr.  Friedberg was one of

     two expert  witnesses for Ross who appeared at the hearing.   This  state-

     ment also  reflects a total of $10,225.50 for analyses of samples.  The

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      regulation  (40 CFR  17.07(b)(l)) limits the compensation of expert

      witnesses to $24.09 per hour.  Application of this rate to total time

      expended  (222 hours) reduces this aspect of the claim by $6,518.52 to

      $5,347.98.  This sum added to the total for analyses ($10,225.50)

      equals $15,573.48.

 16.   The itemized statement of Mr. Paul S. Epstein, Ross1 other expert

      witness at the hearing, reflects a total  of 36 hours expended on the

      Ross matter.  This time is billed at the rate of $50.00 an hour,

      which together with travel and out-of-pocket expenses of $345.00,

      comprise the total amount claimed of $2,145.00.  Application of the

      maximum hourly rate set by the regulation ($24.09) would reduce the

      fee claim by $872.76 to $927.24.

 17.   The application includes a net worth statement reflecting  that Ross

      has total assets of approximately  $3.3 million.   Included  with the

     application  is  a statement that  there were  no  transfers  from,  or

     obligations  incurred by, Ross in the one-year  period prior to  March 31,

     1980,  which  reduced  Ross'  net worth  below $5,000,000.    The  appli-
                     t :   .                                                 "*•'
     .cation states  that at  the time the proceeding  giving  rise  to this

     application  was  instituted,  Ross had  50 employees  and that at  no time

     has it had more  than 500 employees.

18.  Complainant  has  filed an  answer to the application  and Ross has  filed

     a reply  to the answer.


                               Conclusions


1.    Ross is  the  prevailing  party  and a qualified party  to receive  an

     award  under  the  EAJA (5 U.S.C. 504).

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                                    8


 2.    Complainant was  not substantially justified in issuing the complaint
                                                                    •
      and  pursuing the proceeding charging Ross with violations of the

      Toxic.Substances Control Act and there are no special circumstances

      making an award  to Ross unjust.

 3.    Ross did not engage in conduct which unduly protracted the

      proceed ing.!./

 4.    Save for amounts claimed by experts in excess of the maximum hourly

     -rate allowed by  40 CFR 17.07(b)(l), amounts claimed are adequately

      documented, are  considered to be reasonable and should be allowed.


                                Discussion


      The Act, 5 U.S.C. 504, provides in pertinent part:

               "(a)(l)  An agency that conducts an adversary
          adjudication shall  award,  to a prevailing party
          other than  the United States, fees and other
          expenses incurred by that  party in connection with
          that proceeding,  unless the adjudicative officer
          of the agency finds that  the position of the agency
          as a party to the proceeding was substantially
          justified or that special  circumstances make an
          award unjust."

     The Act became effective on October 1,  1981, and  applies to  any

adversary adjudication, as  defined  in  section  504(b)(l)(C) of Title  5,

U.S.C., which is pending on,  or commenced after,  such  date.   The

proceeding giving rise to this  application was  commenced on  March  31,

1980, and was  clearly pending on October  1,  1981.   Civil  penalty  pro-

ceedings under § 16(a) of the Toxic  Substances  Control  Act (15  U.S.C.
     3_/  In fact,  there is substantial  basis  for Ross' assertion  that
Complainant delayed  the hearing  and ultimate  resolution of  this matter
by failing to promptly respond to  legitimate  discovery requests.

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 2615(a))  are  adjudications  required  by  statute  to  be  conducted  in

 accordance  with  5  U.S.C.  554  and  the regulation (40 CFR  17.03(a)(3))

 specifically  lists  such proceedings  as  within the  coverage of the  EAJA.

      Legislative history  of the Act!/    is to the  effect  that while no

 presumption that the  agency's  position  was not  substantially justified

 arises  from the mere  fact that the agency lost, the test  is essentially

 one  of  reasonableness and the  burden of proof in this  respect is on the

 agency.   The  rule appears to be that in  order to defeat an award to an

 otherwise eligible  party, the  government must show that its action had a

 reasonable basis in law and fact.  S &  H Riggers and Erectors, Inc. v.

 OSHA, 672 F.2d 426  (5th Cir. 1982);  Enerhaul. Inc. v. NLRB. 710 F.2d 748

 (llth Cir. 1983) and Olsen  v.  Department of Commerce, Census Bureau, 735

 F.2d  558  (Fed. Cir. 1984).  Some courts, however, while not precisely

 articulating the scope of the appropriate standard, have indicated that
     4_/  See House Report No. 96-1418, September 26, 1980, at 10, 11; U.S.
Code Congressional and Administrative News (1980) at-4989: "The test of
whether or not a Government action is substantially justified is essentially
one of reasonableness.  Where the Government  can show that its case had a '
reasonable basis both in law and fact no award will be made.   In this regard,
the strong deterrents to contesting Government action require that the
burden of proof rest with the Government.  This allocation of the burden,
in fact, reflects a general tendency to place the burden  of proof on the
party who has readier access to and knowledge of the facts in question.  The
committee believes that it is far easier for  the Government,  which has
control of the evidence to prove the reasonableness of its action than it
is for a private party to marshal  the facts to prove that the Government
was unreasonable ****."  "The standard, however, should not be read to raise-
a presumption that the Government  position was not  substantially justified
simply because it lost the case.  Nor, in fact, does the  standard require the
-Government to establish that its decision to  litigate was based on a sub-
stantial probability of prevailing."  Id at 4990.

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                                    10


 the  showing  required of the government [to defeat an award] should be

 slightly  above  or more strict than simply reasonableness.!/

      Irrespective of the rule to be applied, however, it would seem to be

 clear that Complainant's action herein did not have a reasonable basis

 in fact and  cannot be. regarded as substantially justified.  The final

 decision  establishes that Complainant's evidence showed prima facie that

 sample SOI contained PCBs at a concentration of 4.4 ppm, rather than 4400

 ppm  as charged, and that Complainant's contention that this gap could be

 bridged by application of the correct  dilution factors to the reported

 result was based on mere speculation.   Inasmuch as Complainant had the

 burden of establishing the violation charged by a preponderance of the

 evidence  and incineration of PCBs in concentrations below 50 ppm in an

 unapproved incinerator was not a violation of the .Act or regulations,

 the  charge against Ross was dismissed.

      Complainant argues that reasonableness  in this context means  that

 the  agency must be possessed of facts  from which it could reasonably

 believe that the .law has  been  violated and points to the ALJ's finding
                    .? :
 that Ross had not established  its contention that tests  on sample  SOI had

 been improperly conducted or calculated (Answer at 11,  18, 19).

 Complainant says that  another  way of stating the test is that  the  agency's

 position  is reasonable  if the  evidence was sufficient  to establish  a  prima

 facie case in its favor,  unless  explained  or rebutted.
     5/  See Wolverton v.  Schweiker,  533  F.Supp. 420  (D.Idaho,  1982);
Spencer v.  NLRB,  712 F.2d  539 (D.C. Cir.  1983).  This is apparently  based
on the fact that  the Senate  Judiciary Committee considered  and  rejected
an amendment that would have changed  the  applicable standard from  "sub-
stantially  justified" to "reasonably  justified," the  former being  regarded
as the greater  burden.

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                                     11
      While  Complainant's description of the  applicable  standard for
 determining whether  its action was  substantially  justified  within the.
 meaning  of  the EAJA  is almost certainly too  lenient,**/   no issue need be
 taken  therewith in this instance because it  is clear that Complainant has
 not  established a prima facie case  of a violation of the PCB rule where
 its  documentary evidence shows a concentration of incinerated PCBs of
 only 4.4 ppm, far below the legal limit of 50 ppm.  It  is true that the
 ALJ, based  in part on the fact Ross1 expert, from an examination of the
 CRL  file, was apparently able to duplicate reported PCB results as to
 sample SOI, found that Ross had failed to establish its contention that
 the  tests were improperly conducted or calculated.  The data upon which
 the  expert's determination was based is not  in the record, however,  and
 the  final decision holds as a matter of law  that  failure to document or
 otherwise support the final  reported PCB concentration (Compl.ajnant's
 laboratory director having acknowledged that good  laboratory practice
 required such documentation) under the  circumstances present here  requires
 the  conclusion that Complainant has not met its burden of proving  the
 violation charged by-'a preponderance of the evidence.
     The result might well  be different if Complainant's documentation
 bridged the  gap between  the  reported result and the figure  shown on  the
 computer printout and doubts were cast  on  the validity of the  tests  by
 independent  evidence introduced by  Ross.Z/   In that  instance,  it  would be
     6/  See Sullivan,  The Equal  Access  to Justice Act In the  Federal  Courts;
84 CoTum.  L.  Rev.  1089,  wherein  it  is  argued that the standard  should  be
the existence of a genuine controversy in which the government  has  some
likelihood of prevailing.   This  would  appear to require as a minimum some
evaluation of opposing  evidence,  which is not true as to the mere ability
to prove a prima facie  case.
     TJ  This appears to be precisely  the case with regard to  sample S28
collected  from the mixing  pit  on  November 5, 1979.

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                                    12


 apparent  that  Complainant had made out a prima facie case, which is

 not true  as  to sample SOI herein.  Although the final decision does

 state  (at 19)  that the burden of proof therefore shifted back to Complain-

 ant to provide evidence of how the so-called dilution factor was used in

 the laboratory procedures followed by Complainant's analyst, the mentioned

 discrepancy  was highlighted through the cross-examination of Complainant's

 own witnesses.  It is therefore concluded that Complainant failed to make

 out a  prima  facie case as to sample SOI and that its action as to that

 sample was not substantially justified even under  its own explication of

 the applicable standard.^/

     Split or  partial awards under the Act are clearly appropriate and even

 if  its action as to sample SOI is deemed  substantially justified, its

 action as to the other samples cannot  be.   As  Ross  points out (Reply to

 Complainant's Answer at 8),  Complainant had no evidence that the  contents

 of  the 17,000-gallon tank were incinerated between  July 10 and October

 2,  1979, as charged in the complaint and  no evidence as  to the disposition

 of  the wastes present in. the mixing pit on November 5,  1979.   Complainant  ..
     Bf  In Ulrich v.  Schweiker,  548  F.Supp.  63  (D. Idaho,  1982) the  court
reversed the Secretary's  decision  denying disability benefits under  the
Social Security Act.   Nevertheless, the  application for  fees under the EAJA
was denied, the court  holding  that there was  a genuine dispute as to
plaintiff's eligibility,  the decision  was a  "close  call" and therefore,
the Secretary's decision  was substantially justified.  Cf. Wolverton v.
Schweiker (note 5, supra),  where  Secretary's  decision was  not supported
by substantial  evidence or, according  to the  court, any evidence, Secretary's"
decision was not substantially justified and  an  award under the Act  was
made.  In Cinciarelli  v.  Reagan,  729 F.2d 80  (D.C.  Cir. 1984), the
government settled the underlying  litigation  after  the government's
position on statutory  interpretation was rejected on appeal.  In subsequent
litigation under the EAJA,  the government's position as to interpretation
of the statute, although  erroneous, was held  to  be  substantially justified.
Its position on the facts,  however, was held  not to be substantially
justified, making a partial award  appropriate.

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                                     13
 did not bother to appeal  the ALJ's dismissal  of the complaint .in these

 respects.  Accordingly, apart from any questions and the validity of the

 tests,.i/  .its action as  to these wastes  cannot be regarded as

 substantially justified.

      Complainant's answer to the application  includes references to

 citizen complaints of odors,  haze and  respiratory  ailments  and a  copy  of

 a  memorandum,  dated November 5,  1979,  referring,  inter alia,l?_/    to com-

 plaints of  odors  by residents  in  the area of  the Ross facility.   Included

 as Attachment  B to the answer is  a petition signed by over  100 residents

 of Eaton Township that proper  operational controls  be imposed on the

 facility so that  it operated without endangering the  petitioners'  health.

 Ross  was  permitted  to  reply to the  answer and has  filed a motion to

 strike  the attachments  and  references thereto in the  answer, asserting

 that  the  petition was  not in the  record of the proceeding and pointing

 out that  Complainant  has  not moved  for further proceedings  in accordance

 with  40 CFR 17.25(b).   Ross further points out that in the absence of a

 motion  for further  proceedings, any additional facts must be supported
                     _•- :  •  •
 by affidavit in accordance with 40 CFR 17.22(c), which has not been done

 in this  instance.    Ross alleges that the attachments  and references
     _9/  Although Complainant is considered to have established a prima
facie case that sample S28, collected from the mixing pit on November 5,
1979, contained PCBs at a concentration .of 67.3 ppm, the CRL file and
computations were reviewed by Ross1  expert, Mr. Paul Epstein, and the ALJ
held that his uncontradicted testimony cast sufficient doubt as to the
validity of the CRL reported result  that it could not be held Complainant
had established by a preponderance of the evidence the sample contained
PCBs equal to or in excess of 50 ppm.

     10/  It is of interest that the memorandum refers to the conflicting
data BTses arising from the large differences  between PCB concentrations
reported by CRL on samples taken on  July 10, 1979, and the Ohio EPA on
samples taken on October 2, 1979.  The memorandum attributes the differences
to analytical error and/or the fact  product sampled in July may have been
incinerated.

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                                    14


 thereto  are  irrelevant to the issue at hand and highly prejudicial (Reply

 to Answer  at  2).   Ross says that it was charged with a violation of an

 act and  regulations addressing the manufacture, use and disposal of PCBs

 and that this had  nothing to do with water contamination, odors, loss of

 vegetation or medical problems.  It asserts that no such complaint has

 ever been  brought  against Ross by any state or federal agency.

      There being no apparent connection between odors and other complaints

 from residents of  the area concerning operation of the facility and the

 allegations in the complaint, Ross'  motion is prima facie well taken.

 Although Complainant has not so argued, the only apparent purpose of

 including the citizen petition as to the operation of the facility is to

 show that special  circumstances make an award to Ross unjust.!!/   Because

 there is no evidence, other than the alleged improper disposition of PCBs,

 that  the Ross facility was operated  in violation of any federal, state or

 local laws or regulations and because  any  such inquiry would involve  extran-

 eous  matters clearly beyond the scope  of the complaint against Ross,  any

 contention that the citizens'  complaints in this instance can be used as a

 basis, for finding an award to Ross  unjust  is rejected.   The motion to

 strike is granted.!£/

     Complainant has objected to a  number  of items in the application foe.

the  reason, among others, the  charges  were incurred, prior to the issuance
     ll/  Absent such a purpose,  the  petition hinders  rather  than  helps
Complainant's position, because  it tends to demonstrate the complaint  was
issued without adequate investigation  in response to public pressure.

     12/  Before the Judicial  Officer, Complainant filed a motion  for
leave to file a reply to the motion to strike.  This motion was  denied
without prejudice to Complainant's right to renew the motion  before the
ALJ (letter from Judicial  Officer, dated July 19, 1984).  Complainant
has not renewed the motion.

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                                    15





of the complaint and thus  are not  properly part  of  a  proceeding  under



40 CFR 17.03(a)(3).   Ross  points out that the applicable  statutory



language (5 U.S.C.  504(a)(l)) is that the fees and  expenses  claimed be



"incurred in connection  with that  proceeding," i.e.,  the  proceeding in



which the applicant  was  the  prevailing party,  and alleges that all the



claimed amounts  are  properly recoverable.   Other than the amounts for



expert witnesses  in  excess of the  hourly  rate  allowed by the regulation,



which are referred to in the findings and hereinafter, Complainant's



objections  are considered to be  without merit.   Specific reasons for



overruling  the objections follow:



b.   Charges (attorneys' fees) for telephone  calls, research, review,



     discussions, etc.,  on November  5 and  6,  1979, January 3, 15, 16, 17



     and 28,  February 8  and  26,  and  March  6 and  16, 1980.



         Ross says  that these services were performed in anticipation



     of the  proceeding,  were therefore in  connection  with the pro-



     ceeding  and are  properly  recoverable.



         Ross was clearly entitled to legal representation in its



     efforts to head-off or  avoid the filing of a complaint and to be



     prepared and informed when, and  if, a complaint was filed.   Ross1



     contention that these services were in connection with the proceeding



     and  are therefore recoverable is accepted.  Questionable,  however,  is



     that portion of the hour of services  charged on January 3,  1980,  which



     represents a call from Mr.Triedberg  concerning a stack test.   Prima



     facie, this  concerns the Clean Air Act rather  than  the TSCA.  Con-



     ceivably, however, it could relate to tests  as  to the qualification of

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                                    16


      Ross'  incinerator to burn PCBs and inasmuch as the charge is not

      otherwise  broken down, the charge is accepted-13/

 c.    Complainant objects to 15 minutes charged on April 7, 1980, for a call

      to  a Pat O'Connor concerning Federal EPA matters.

          Ross explains that Mr. O'Connor was and is Ross' accountant and

      that it is necessary that he be fully informed as to suits against the

      firm.  This explanation is accepted and the charge is allowed:

 d.   -Complainant also objects to a total  of over 5.5 hours charged on

      June 3 and 5, 1980, concerning television and newspaper coverage of

      the proceeding against Ross.

          Ross explains that there was a barrage of unfavorable publicity

      concerning the complaint against  Ross,  that Mr.  Ross, President of

      the applicant at the time, was interviewed, by representatives of the

      news media and that Mr. Ross made the decision to appear on a TV

      news broadcast in order to explain his  company's position to the public.

      Because adverse publicity could,  and allegedly did,  have an unfavorable

      impact on Ross'  business,!!/   "its contention that these services were_.

     in connection with  the proceeding is accepted.   These charges are

     allowed.
     13/  The purpose of the  EAJA  is  to  encourage  contests  of  unreasonable
or un3ustified government  actions  and this purpose would not be served  by
a crabbed or narrow interpretation of allowable fees  and expenses  under
the Act.

     14/  Although  not part of  the record, it  is of interest that  a  letter
from counsel  for Ross to the  ALJ,  dated  October 1, 1980, refers to a  press
release concerning  the case issued by EPA at the time the complaint  was
issued and to statements made by counsel for Complainant at a  meeting of
concerned area residents.  Complainant,  then,  appears to have  been largely
responsible for the publicity concerning the proceeding and its present
objection to expenses incurred  by  Ross in an effort to counter an
unfavorable publicity barrage comes with an ill grace.

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                                    17



 e,f. Complainant objects to one-half hour charged for a call concerning

     hazardous waste from EPA on July 16, 1980, and to  15 minutes charged


     on October 6, 1980, concerning a U.S. EPA Task Force.


          Ross points out that it operates a hazardous waste incineration

     facility and alleges that both calls related to the proceeding against


     Ross.  This explanation is accepted and these charges are allowed.

 g.   Complainant objects to charges on July 22, October 17, 20 and 28,

     •1980, concerning Freedom of Information Act requests and an appeal


     from an apparent denial of such a request.  Complainant says that

     these charges are not properly part of the proceeding and therefore

     unallowable (Answer at 5).

          Ross asserts that these charges were in connection with the


     proceeding, because they were necessitated by Complainant's  ignoring

     its attempts to make discovery and  thus obtain information essential

     for its defense.   As indicated (note 3,  supra),  the record supports


     Ross in this respect and these charges  are allowed.

 h.   Complainant objects to charges shown on  November  13,  1980, which


     "include preparation of RCRA plans and two calls  to Mrs.  Cromling,

    1 Executive Vice  President of Ross, concerning  these  plans.

          Ross alleges  that preparation  of the RCRA plans  involved  an


     analysis  of this  proceeding's  impact on  such  plans  and that  there-

     fore the  fees for  such time are allowable.   Although  the matter..is

     not free  from doubt,  this explanation is  accepted.


j,k.
l,m
& n. Complainant objects to time charged  on October 15,  1981, for a call

     to the  ALJ  as to whether  a  transcript of  the  hearing  had been filed,

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                               18





 for  a  call  on  January  4,  1982, to the ALJ relative to an extension



 of time to  file  a  brief,  for calls to the Judicial Officer on March 2,



 1982,.relative to  an extension to file an appeal and a brief in



 support thereof, for a call on April 13, 1982, relative to an extension



 of time to  file  pleadings and for charges in the total amount of



 $148.65 for express mail.



     These  charges were all incurred in connection with the proceeding,



•are  normal  and expected happenings in present day litigation and are



 clearly allowable.



 Complainant objects to time (3.5 hours) charged on December 30, 1981,



 which includes research of the Equal  Access  to Justice Act upon the



 ground this time was not properly part of the proceeding.



     Ross1 answer to this argument is less than satisfactory, merely



 stating that research regarding the EAJA was included, because the



 Act was mentioned in its brief.  It is  concluded,  however,  that this



 time is properly chargeable, because  it has  been held  that  under the



 EAJA applicable to judicial  proceedings (28  U.S.C.  2412) expenses



 incurred in bringing a  successful  EAJA  suit  are recoverable.



 Cinciarelli  v.  Reagan,  (note 8,  supra).   The  language  allowing



 recovery of attorney's  fees  in  judicial  proceedings  tracks  that



allowing such  recovery  i.n  administrative  proceedings and no  reason  is



apparent why a  similar  rule  should  not  apply  to the  latter  proceedings..

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                                     19


      Regarding  its  claim  for  expert  witness  fees,  which  as  noted  previously,

 were  computed at  rates in excess of  that  allowed by  the  regulation,  Ross

 points out.that the Act (§  504(b)(1)(A))  provides  that recoverable  "fees

 and expenses" includes reasonable expenses of expert witnesses and that

 the amount of fees  is to be based upon prevailing  market  rates for the

 kind  and quality  of services  furnished.   Ross argues that the hourly  rate

 charged by Messrs.  Epstein  ($50.00)  and Friedberg  ($54.00)  is nearly  the

 same-and constitutes strong evidence that the prevailing market rate  for

 such  services is  approximately $50.00 an  hour.  Recognizing that the  Act

 further provides that no expert witness may be compensated at a rate  in

 excess of the highest rate paid by the involved agency for expert

 witnesses, Ross attacks the $24.09 hourly rate set by the regulation  as

 unreasonable and contrary to law.  Regardless of the merits of this

 argument,  the ALJ may .not  ignore or invalidate the regulation and is

 bound thereby.

     Ross' application is  otherwise in conformity with the Act and

 regulation.Jjj/   •.
     15/  In a letter to counsel,  dated August 2, 1984, the ALJ inquired
whether Ross presently desired a hearing and pointed out that the
application did not include the statement required by 40 CFR 17.13(b)(l)
as to the hourly rate billed and paid by the majority of counsel's  clients
during the relevant time period.   The omitted statement was supplied by
a letter from counsel, dated August 14, 1984, wherein it was alleged that
the rate of $75.00 per hour specified on page 22 of the amended appli-
cation and incorporated by  reference in its  affidavit was considered to
comply with the cited requirement.

-------
                                    20


                                Conclusion
      It is recommended that Ross1 application for fees and expenses under

 the  Equal Access to Justice Act (5 U.S.C. 504) be allowed in  the  amount

 of $71, 243. 17. li/
     Dated this
13
day of September 1984.
                                                 T. Nissen
                                          Administrative Law Judge
     16/  This  sum  is derived by deducting the amount claimed for expert
witne?? fees  above  the  amount allowed by the regulation ($7,391.28) from
the total  claim of  $78,634.45.  If Complainant's position as to the
propriety  of  the sampling and testing of sample SOI be regarded as
substantially justified, it is concluded that one-half of the recommended
total  claim should  be allowed.

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36

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               UNITED STATES ENVIRONMENTAL PROTECTION Af,ENCY     'w '  '.
                                                                     i ' -

                          BEFORE  THE  ADMINISTRATOR                       . *'
                                                                            */•
 In the fitter  of                       )                                        ' J"

 Petroleum  and  Power  Maintenance        )        Docket No.  TSCA  V-C-189
   (PPM).  Inc.,                         )
                                       )
                     Respondent         )


      Toxic Substances Control Act -  Rules of Practice  - Default Orders

 Where Respondent failed to  supply information directed to be furnished

 by the ALJ in a prehearing  exchange  and failed to respond to an order to

 show  cause why a default order should not be entered, Respondent was in

 default pursuant to 40 CFR  22.17(a), Complainant's prehearing exchange

 was sufficient to make a prima facie case in its favor, and an order was

 entered finding violations of Act and assessing full amount of penalty

 proposed in complaint.


     Appearance for Complainant:   Lisa S.  Seglin
                                  Assistant  Regional  Counsel
                                  EPA, Region V
                                  Chicago,  Illinois

     Appearance for Respondent:    Larry A.  Ring
                                  President
                                  Petroleum  and Power Maintenance  (PPM),
                                     Inc.
                                  Canton,  Ohio
                              Default Order
     This is  a  proceeding  under §  16(a) of  the  Toxic  Substance Control

Act (TSCA), 15  U.S.C.  2615(a), instituted by a  complaint filed by the

Director of the Waste  Management Division,  Region V,  United  States

Environmental Protection Agency, against Respondent,  Petroleum and

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 Power Maintenance,  Inc.  (PPM), on January  18,  1934.  PPM  filed  an  answer
                                                                    •
 to the complaint  and  request  for hearing on April 6, 1984.   The natter

 was referred to the ALJ  by order of designation on April  24,  1984.  By

 letter,  dated Kay 7,  1984, the ALJ directed counsel for Complainant to

 file a statement  regarding settlement by June  15, 1984, and an  exchange  ..

 of prehearing information by  both parties on or before June 29,  1984,  if

 the case was not  settled.  On June 15, 1984, counsel  for  Complainant

 filed a  statement reflecting that the parties had not reached an agreement

 to settle the matter.

      As part of the prehearing exchange,  the parties  were required to

 submit a list of witnesses intended  to be  called  at the hearing with a

 brief  narrative summary of their  expected  testimony  and copies of all

 documents and exhibits intended to be  introduced  into evidence.

 Additionally, .the Complainant  was  required  to  submit  summary evidence

 supporting its  allegations and PPM was  required to explain its denial  of

 Complainant's allegations.  The Complainant  fully complied with this

 directive on June  '29,  1984,  but PPM made no  response.

   -  On July 24,  1984, the ALJ issued  an order  directing  PPM to show cause

 on or before August  17,  1984,  why a default  order should  not  be  entered

 for PPM's failure  to comply  with the ALJ's directive.   PPM~did not  repTy  to

the order to show  cause.i/  On August 21, 1984, the Complainant filed  a
     I/  The order was sent certified mail, return receipt  requested,  but
was returned as unclaimed on August 21, 1984.  A copy of the order was  then
mailed to Respondent by regular mail on August 2.1, 1984.  The envelope
containing the order has not been returned and is presumed to have been
received  by PPM.

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 motion for default judgment,  which was served upon the PPM by certified

 mail.2/   The documents  and exhibits submitted by Complainant on June 29,

 1984, establish a prima  facie case against the Respondent, that is, that

 PPM has violated Federal  regulations regarding recordkeeping and storage

 required for polychlorinated  biphenyls (PCBs) set forth in 40 CFR Part 761,

 promulgated  under § 6 of  TSCA, thereby violating § 15 of TSCA, 15 U.S.C.

 2614.  Said  documents and exhibits  are incorporated into and made .a part

 of the record  of  this proceeding.

      By reason, of the foregoing, Respondent  is  found  to be in  default

 pursuant  to  the Consolidated Rules of  Practice  Governing  the Administrative

 Assessment of  Civil Penalties and the  Revocation  or Suspension of Permits,

 40 CFR 22.17.  Such default  constitutes an admission  of all facts alleged

 in the complaint  and a waiver of hearing by Respondent  as  to such factual

 allegations.


                             Findings of Fact


 1.    The  Respondent,  PPM,  is a Delaware corporation, which has a place

     .of business in Louisville,  Ohio.

 2.   On February 25,  1983, a representative of U.S. EPA conducted an

      inspection of Respondent's  Louisville, Ohio facility.

 3.   At the time of inspection, PPM maintained a PCB storage area on the

     east end of the  feed  mill.
     2/  In a  telecon  on  September  12,  1984,  counsel  for Complainant  stated
the motion had been  returned unclaimed  on  September  11,  1984  and  that  the
secretary to PPM's president had stated the  firm had  filed  for  bankruptcy
and was no longer accepting mail.   It is concluded that  the motion  and the
order to show  cause  have  been available to PPM  for more  than  the  20-day
period specified by  40 CFR 22.17(a).

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 4.   The regulation, 40 CFR 761.6S(b),  requires that  areas  used  for



     storage of PCBs and PCB items  designated  for  disposal  have  an



     adequate roof and walls,  impervious  floor, continuous  6-inch-high



     curbing, and meet the minimum  containment volume requirements.



 5.   At the time of inspection, PPM had stored numerous drums of PCB



     liquids, PCB solids,  and  empty PCB-contaminated  drums  in an area



     which  did not have  an  impervious floor and continuous  curbing.



 6.   40 CFR 761.65(c)(5) requires all PCB articles and PCB  containers



     in storage  be checked  for leaks at least once every 30 days.



 7.   Respondent's  drums  of  PCB liquids, PCB solids, and PCB-contaminated



     drums  are "PCB  Containers" and "PCB Items" within the meaning of



     40 CFR 761.3(v) and (x).



8.   At the time of  inspection, PPM had not conducted monthly inspections



     for leaks in  the  storage area.



9.   40 CFR 761.65(c)(8) requires that PCB articles and PCB containers



     shall  be  dated when they are placed ~in storage.



10.   At the time of  inspection, PPM's PCB  containers,  located in  the PCB



     .storage area, were not dated  as to  when they were placed in  storage.



11.   40 CFR 761.180(b) requires that each  owner or  operator of a  facility



     used for the storage or disposal  of PCBs and PCB  items  prepare  and



     maintain a document which  includes:   the date  when any  PCBs  and PCB



     items were received by the facility during the previous calendar year



     for storage or disposal; the  date when  any PCBs and PCB items were



     disposed of at the disposal facility  or transferred to  another  disposal



     or  storage facility; a summary  of the total weight  in kilograms of



   .PCBs and PCB articles  in containers and the total weight of PCBs

-------
      contained in PCB transformers  that  have been  received,  transferred,



      or retained  at  the  facility during  the  previous  calendar year.



 12.  At the time  of  inspection, there were 78 55-gallon drums containing



      PCB liquids,  PCB  solids, and empty  PCB-contaminated drums located in



      Respondent's  storage area.



 13.  At the time  of  inspection, PPM had  records  for only 56  55-gallon drums



      located in storage.





                               Conclusions







      By reason of the facts  set forth in the findings above, PPM failed



 to comply with Federal regulations  governing PCBs as follows: Respondent



 failed  to properly store, inspect and date PCB containers  in violation



 of §  15 TSCA, 15 U.S.C. 2614,  and 40 CFR 761.65(b), (c)(5)  and  (c)8;



 Respondent failed  to  prepare and to  maintain  complete  annual  PCB  documents



 in violation of §  15  of TSCA,  15 U.S.C.  2614, and 40 CFR 761.180(b).



     Pursuant to 40 CFR 22.17, the penalty proposed to be assessed  in



 the complaint,  $20,000, shall  become  due  and  payable by Respondent, PPM,



 without further proceedings upon the  issuance of  this  default order.





                                 Order





     Pursuant to § 16(a)  of TSCA, 15 U.S.C. 2615(a), a  civil  penalty of



 $20,000 is hereby  assessed against Respondent, PPM,  for violations of



the Act found herein.

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      Payment  of  the  full  amount of the  civil  penalty assessed  shall  be nade

 within sixty  (60) days of the service of the  final order upon  Respondent,

 PPM, by forwarding to the Regional Hearing Clerk a cashier's check or

 certified check payable to the United States of America.I/
Dated  this
 nf
/y  .
                                  day of September 1984.
                                      Spencer- T.  Nissen
                                      Administrative Law Judge
     3/  Pursuant to 40 CFR 22.17(b), this default order constitutes an
initial decision, which shall  become final unless appealed in accordance
with 40 CFR 22.30 or unless the Administrator elects, sua sponte, to
review the same as therein provided.

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-------
                    BEFORE THE ADMINISTRATOR
              U.S. ENVIRONMENTAL PROTECTION  AGKNCY
                        WASHINGTON, D.C.
                                                         -»»"
 In the Matter of:                 )
                                   )
                                   )
 THE DOW CHEMICAL COMPANY,         )     Docket No. TSCA  (16(a))
                                   )
                                   )
      Appellant                    )
                          FINAL ORDER


      Pursuant to terms of an undated stipulation  (copy

 attached)  by  the Dow Chemical Company (Respondent), and

 the U.S.  Environmental Protection Agency (Complainant),  the

 Rulings  issued  in this case  on September 28, 1981, by Admin-

 istrative  Law Judge  Perlman,  on July 28 and August 17, 1982,

 by Judicial Officer  McCallum,  and the order and opinion on

 October  4,  1982, by  Administrative Law Judge Harwood are

 hereby vacated.and those  Rowings and that Order and Opinion

 shall have  no precedential value.  The vacation of those mat-

 ters  shall  not,  however,  preclude EPA,  after considering the

--issues anew,  from reaching the same conclusions, as contained

 in those rulings and  order and opinion,  in  other cases.

      It  is  ordered that Respondent is hereby assessed a civil

 penalty of  $120,000 pursuant  to Section  16  of the Toxic Sub-

 stances Control  Act  in full  settlement  of the claims contained

 In the complaint filed  in this case.   Payment of the full

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                             -2-
amount of the civil penalty shall be made within 25 days

from the- issuance of this final order by sending a certi-

fied or cashier's check, payable to the Treasurer of  the

United States of America, to the Hearing Clerk (A-110),

EPA, 401 M Street, S.W. (Room 3706), Washington, D.C.  20460
                                Ronald L.  McCallum
                          Chief Judicial Officer (A-101)
Dated:  SEP-2 4 1984

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             IN THE UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
THE DOW CHEMICAL COMPANY,              )

           Appellant - Petitioner,


                                       )         No. 80-1498 and
WILLIAM RUCKELSHAUS, Adninistrator     )             82-3536
U.S. ' Environmental Protection Agency,  S       (Consolidated Cases)
et al..             -                    )

           Appellees - Respondents.    )
                          STIPULATION

          The Dow Chemical Company (Dow), Appellant, in No.

80-1498 and petitioner in No. 82-3536, and Williem Ruckelehaus,

Administrator,  U.S.  Environmental Protection Agency (EPA) and'

•"VA, appellees  in No.  80-1498 and respondents in 82-3536, are

the parties to  the above-captioned case.

          In the above-captioned cases, the Dow Chemical Cocpany

is seeking judicial  review of decisions of the U.S. Environmental

Protection Agency, which have resulted in imposition of a civil"

penalty of §120,000  for violation of regulations covering

polychlorinated biphenyls (PCBs) issued ur.der section 6(e) of

the Toxic Substances Control Act (TSCA), 15 U.S.C. §2605(e).

At issue are certain activities of Dow between July 1, 1978,

and August 1, 1979,  involving heat transfer fluid containing

rocnochlorinared biphenyl (MCB).  Section 6(e) of TSCA regulates

(PCBs).  A principal issue in these cases is whether MCB is a

PCS within the  meaning of section 6(e).

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                             -  2  -





          EPA,  in accordance with Orders issued by the United



States Court of Appeals for-the District of Columbia Circuit



in Environmental Defense Fund v.  Environmental Protection



Agency. (Ko. 79-1580).,  is to propose  and take final action upon



anendaents to the PCB regulations (40 C.F.R. 761) »  As part of the



proceedings to  develop attended  PCB  rules,  on April 15, 1983, the



Environmental Defense.Fund (EDF)> the Natural Resources Defense



Council" (HRDC)  and the Chenical Manufacturers Association (CMA)



jointly submitted a proposal for  amendment of the PCB rule.

•               •

The EDF-NRDC-CMA proposal would,  among other things, require



manufacturers to assure that the  concentration of inadvertently



generated PCBs  averages below 25  parts per million (ppm) per"
                       •


year and is at all times below  50 ppm.  The proposal_ would



treat MCB as a" PCB.  Hov/ever, the proposal applies a discount:



factor of 50 to MCB* because, the  proposal recognizes a lower



level of environmental persistence  and accumulation" of MCB as



compared with the higher chlorinated  biphenyls.  (The aspects



of the proposal Described in this paragraph are hereinafter



referred to as the "HCB regulatory  level and discount factor").



          EPA has already stated  that the EDF-NRDC-C71A proposal



"provides a satisfactory framework  for the ongoing uncontrolled



PCB ruleisaking" and that "substantial portions or even possibly



all of the proposal way be incorporated into its proposed 'rule



for uncontrolled PCBs.11  Report to  the Court, Affidavit of Don* R.



Clay, Environmental Defense Fund, Inc., ec al. v.  Environmental



Protection Agency. (D.C. Cir. No. 79-1580). filed June 27, 1983.

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                             - 3 -   •

          Regulation  along the lines of the EDF-^?.DC-CMA
^roposal,  including an MCB regulatory level and discount factor
as described  above, would substantially resolve Dow's practical
problems.   Accordingly,  if such a regulation were to be issued
by EPA, Dou is willing-to withdraw the present litigation.
          Dew and  EPA agree that it would be inappropriate and
wasteful to continue  to litigate these cases.since EPA cay
an;end the PCB rules  in the manner described above.  Accordingly,
Dew and EPA,  intending to be bound hereby stipulate and agree
as follows:
          1.  If EPA  promulgates auier.dcents to the PCB regu-
lations to provide in substance the MCB regulatory level and
discount factor  described above, then:
          a.  Neither Dow nor any of its subsidiaries _will seek
judicial review, or  review in an administrative proceeding under
                                                 •
section 16(a), TSCA,  -15 U.S.C. 2615(a), of the amended PCB
regulations insofar  as they provide such requirements for MCBs;
          b.  Within  30 days from the date of Federal "Register
publication of  such  anended PCB regulations, Dow and EPA will
file a joint irotion  to dismiss Dow's appeal in No. 80-1498,
and co retcand No.  82-3536 to EPA, each party bearing its own
costs; and, upon recand of No. 82-3536 to EPA":
          A.  The Initial Decision and Final Order of EPA
Administrative  Law Judge Harwood, October 4, 1982, together"

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                             -  4  -




 •Ith the ruling of EPA Chief  Adninistrative  Law Judge Perlaan of
                                 •

bepteniber 22,  1980,  and EPA Judicial  Officer McCalluni's rul'ings


of July 28,  1982 and August 17, 1982,  shall  be vacated.  Thac


Decision end Order and these  rulings  shall be deemed to have no


collateral estoppel  or'precedential value, provided that EPA


is not thereby precluded,  after considering  anew the issues


involved, from rendering a decision in other cases that has the


same conclusions;  and


          B.  In lieu of these  vacated rulings, EPA will issue
                                                     •

a final administrative order, consenred to by Dow, in Docket


No. TSCA (16(a)-(!)), as set  forth  in Exhibit A hereto; and.


          C.  Within 25 days  from issuance of the final order


described above, Dow will, pay to  EPA  the civil penalty of $120,000
                               .                •

 .rovided for in Exhibit A, by tendering a certified or cashier's


check payable to the -Treasurer, United States of America In


that amount.  The check shall 'be  sent to the Headquarters


Hearing Clerk (A-110) , EPA, 40* M Street, S.W. (Room 3706),


Washington,  D.C. 20460.


          2.  The--cooperative program [described in the


September 27,  1979,  letter from Richard D. Wilson, Deputy


Assistant Administrator for General Enforceinent. to Paul F.


Orerfice, President  and Chief Executive Officer of Dow Chemical


Company, and the November 26, -1979, draft of the letter which


Dow was to .send to its customers  who  purchased Dowtherm G fluid]


("cooperative program")  is modified as follows:

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                             - 5 -




          a.   the  following deadlines shall apply to Dow's


customers for compliance  with the limits for i'JCBs in their heat


transfer systems:


              i.   If  the  final amended ?CB regulation described
                      •    ^  •

in paragraph  1,  above/ specifies the MCB regulatory level and •


discount factor  described in paragraph 1., then the date for


compliance with  the 11CB levels in the final amended regulation


shall be. the "effective date of the said regulation.


             ii.   If  the  final amended PCB regulation described


in paragraph  1,  above,  specifies any HCB level less than that


described therein, then Dow's custoaere will have 12 months


following the  effective date of the final - amended regulation  -


^.o reduce the  MCB  levels  in their heat transfer systems to


ccnply with the.final  amended regulation.


          b.   To qualify  for this modification to the cooperative


program, any  Dow custocer EUSZ: have both received the Dovtherm


G fluid containing'MC3B prior to September 27, 1979, and

                                  «
participated  in  the cooperative prograra previously.


          c.   This Stipulation will only modify the July 1,


1984, deadline in  the  existing-cooperative program for Dow's


customers to  reduce the level of MCBs to 50 ppm in their heat


transfer systems.-.  All other provisions of the cooperative program


remain in effect until promulgation of the amended PCB regulations


described in  paragraph 1  above.  At that time, to the extent


chat the cooperative,  progreci regains in effect pursuant to

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                             - 6 -




 ub-paragraph (a)(ii) above, it shall be governed by  the
                                 *

 provisions of such amended regulation.  Any Dowtherm  G obtained


 after September 27, 1979, is not subject to this Agreement.


          3.  If EPA fornally proposes or promulgates etoend-


 oents to the PCB regulations which provide requirements for


 MCBs -that are more stringent than the HCS regulatory  level end


 discount factor described in paragraph 1, above, then EPA.and


 Dow will jointly request the Court to promptly reschedule


 submission of Nos. 80-1498 and 82-3536, and Dow reserves the


 right to seek judicial review of EPA's final action on the


 amended PCB regulations.


          4.  Nothing in this Agreement shall operate to waive


 .any legal right of Dow or. EPA unless such a waiver is expressly


  rovided in the Agreement.  Dow has not waived the right to file


 comments in the cur-r-ent PCB rulezuaking proceeding on  any issue,


 including ccznuente challenging the inclusion of MCBs  as PCBs


 in the event that EPA promulgates amended PCB rvles which do

                      .» :
 not provide the MCB re'gulatory level and discount factor described


 above.  In addition, if the amended PCB regulation described


 in paragraph 1 is remanded on judicial review, Dow has not


 waived any rights to assert any available contention  in the


.remand proceedings and in further judicial proceedings arising


 out of the remand proceedings, - including the contention that


 MCBs are no.t PCBs.


          5.  This Agreement will be deemed to be executed


 .id shall becone .effective when it has been signed by the


 representatives of the parties set forth below.




                                Respectfully submitted.

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                             - 7 -
ROBERT V. ZENER
Pepper, Hamilton
  Scheetz
1777 F Street,  N.
Washington, D.C.
(202) 842-8112
       a
 'and

W.
 20006-5279
DAVID T. BUESflfE, Atftomey
U.S. Departtae'nt of  Justice
Environmental^) Defense  Section
Land and Natural Resources Division
Benjamin Franklin Station
Pest Office  Box 7415
Washington,  D.C.  20044-7415
(202) 633-4426/2281
(I _
emic
     GRAY    _
The Dow Chemical Co.
•1030 Dow Center
rJidland. Michigan 48640
(517) 636-0933  '
                 RUTH. G.-BELL, Assistant  Gen'eral Counse
                 ALAN H. CARPI El?
                 ELLEN R.'-SPITALNIK. ,Attorneys
                 United States Environmental
                   Protection Agency
                 401 M Street S.W.
                 Washington, D.C.   20460  •
                 (202) 382-7213
Counsel for Dow
                        'Counsel for the Adninistrator,
                          EPA and EPA

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                    CERTIFICATE OF SERVICE
     I certify that copies of the foregoing Final Order  in
the matter of: THE DOW CHEMICAL COMPANY/ Docket No. TSCA _( 1 6 ( a ) ) ,
were either mailed or hand delivered to the following persons:
By 1st class mail,
postage prepaid:
By hand delivery:
John A. Gray, Esq.
The Dow Chemical Company
2030 Willard H. Dow Center
Midland, MI 48640

Alan H. Carpien, Esq.
U.S. EPA Headquarters
Office of General Counsel
401 M Street, S.W.
Washington, DC 20044
                                                        (LE-132P)
                             Mr.  Terrell Hunt
                             Acting Associate Enforcement Coun-
                               sel f/Special Litigation  (LE-134P)
                             U.S.  EPA Headquarters
                             401  M Street,  S.W.
                             Washington, DC 20044
                             Ms.  Bessie Hammiel
                             Hearing  Clerk
                             Office of  Administrative
                               Judges (A-110)
                             U.S.  EPA Headquarters
                             401  M Street,  S.W.
                             Washington,  DC 20044
                         Law
                            M.  Gail  Wingo
                            Secretary  to  the  Chief
                              Judicial Officer
Dated: SEP 2 4 1984

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38

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         UNITED STATES  ENVIRONMENTAL PROTECTION AGENCY
              BEFORE THE  REGIONAL ADMI N1STRATOR: • r,-
                                            u •  -:«- -  o
 IN RE:                         )
                               )
 Carolina Transformer Co.,      )              TSCA IV-84-0002
   Inc.              '           )
                               )
           Respondent          )
                        DEFAULT ORDER

 Preliminary Statement

     This is a proceeding under Section  16(a) 'of  the  Toxic

 Substances Control Act (15-U.S.C. §2601  et.  seq.),  instituted

 by a Complaint filed by the Director, Air  and Waste Management

 Division, Region IV. United States Environmental  Protection

 Agency, which was served upon Respondent,  March 7,  1984.

 The Respondent filed an Answer dated March 26, 1984.  The

 matter was referred to the undersigned by Order dated April

 24, 1984.   A pre-hearing  letter was issued on May  7, 1984

 requiring the parties to submit certain  information by June

 12, 1984 with replies due  on June 26, 1984.
               i

    A Motion for Extension of Time was filed By the Complainant

 in order that Respondent  could forward financial data, which

might impact prospects for settlement.   This motion was

granted on May 31,  1984,  and a final filing date of July 12,

 1984 was ordered with replies to be filed no later than July

 26, 1984.  On June  20,  1984, Counsel for Respondent waived

 the right to a hearing  in  this matter and Complainant filed a

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                             -2-






 Status  Report on June 29, 1984, stating that Respondent's counsel



 had further advised that Respondent does not intend  to  file



 prehearing papers and would "stand on its Answer  alone."  July 10,



 1984, Complainant then filed a Motion for Stay of  the Prehearing



 Exchange, scheduled to be filed July 12, in that  Complainant



 anticipated filing a Motion for an Accelerated Decision  in  the



 near future.  The stay was granted on July 11, 1984."  Complainant



 then filed, on July 13,  1984,  a Motion to Amend the Complaint



 reducing the proposed penalty  by $4,000 and requesting that ••



 Respondent's original Answer be applied to the Complaint.



 (Complainant's Errata Sheet was filed July 16, 1984, correcting



 page 3 of the First Amended Complaint.)   Such Motion was granted



 on July 16, 1984.   Complainant's Motion for an Accelerated  Decision



 with supporting  exhibits  was filed August  7,  1984 and received



 by Respondent on August  9,  1984.   Respondent  has made no reply to



 the Motion for an  Accelerated^  Decision.   Rather than rule on this



 Motion,  I chose  to treat  it as  a  Motion  for Default Judgment in



 that Respondents! s  notice  of  July  21,  1984  constitutes an antici-



patory  breach of my  prehearing  order  and,  indeed,  no^correspondence




or documents  of  any  kind  have been filed by Respondent since  the



June 21, 1984 notice of waiver  of  right  to  an  administrative




hearing.



    All  of  the above documents  are hereby  incorporated into  and



made a part of the record  in this  proceeding.

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                              -3-






     By reason of the  foregoing, the  Respondent is hereby found



 to be  in default pursuant to  the  Consolidated Rules of Practice



 as issued under the Act  (40 C.F.R. §22.17).   Such default



 constitutes an admission of all facts alleged in  the complaint



 and a  waiver of hearing by Respondent.   (Respondent also filed



 a  waiver of its right to a hearing on June  29,  1984.)



 Findings of Fact



     1.  Respondent is a corporation doing business  in  the State



 of  North Carolina.



     2.  Respondent is included in the term  "Person"  as defined



 in  40  C.F.R. §761.3(aa)  and  as such is subject  to the Toxic



 Substances Control  Act (TSCA), 15 U.S.C. §2601  e_t seq. and the



 regulations promulgated  thereunder, 40 C.F.R. Part  761 (July  1,




 1983).



     3.  On or about April 26-27,  1983, an inspection of Respondent's



 facility was performend  by an, authorized employee of EPA  pursuant



 to Section 11 of  TSCA.



    4.  At the time" of the aforementioned inspection, Respondent



collected waste oils  from transformers and stored them in a bulk



storage tank.   The  storage tank contained approximately 1500



gallons of  liquid of  which 2  ounces were obtained as a sample.



The sample,  identified as TS.235114,  revealed upon analysis 72  ppm




PCBs.

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                             -4-






     5.  The storage tank which was unmarked  is  a  PCb  container



 as  defined at 40 C.F.K.  fc7bi.3(v) and 40 C.F.R.  S7bl.l(b)



 Respondent violated 40 C.F.R. $761.40 (a) (1) by  failing to



 mark the PCB container.




     6.  There was no secondary containment surrounding  the



 storage tank as described in 40 C.F.R. §ii2.7(c)(l) and  40



 C.F.R. §112.7(e)(2).  Respondent violated 40 C.F.K. S»761.65(c) (7) (ii)



 by  improperly storing PCBs.






     7.  A drained 250 gallon capacity Westinghouse transformer,



 serial number 6356153,  was  stored at the 1-95 and Middle Road



 facility.   A sample of  residual oil was  collected ana identified



 as TS235118.   The sample revealed upon analysis t>0 ppm PCBs.  A



 9 gallon capacity Allis Chalmers ACP transformer,  serial  number



 29992349,  was also stored at the 1-95 and Middle Road facility.



A sample of oil  was collected and identified as TS235115.  The



 sample revealed  upon analysts 62 ppm PCBs.   The-two transformers



are PCB Articles, as defined  at-40-C.F.R.   §761.3(t).   Respondent



violated 40 C.F-.R.  §761.80(a)  by failing  to  maintain  records on




the PCB container and PCB articles.




Conclusions



    By reason  of the facts set  forth  in the  above, the Respondent



failed to  (1)  properly  mark .a PCB container,  as  required by 40



C.F.R. §761.40(a)(1); (2) tailed  to properly  store PCBs  as



required by 40 C.F.R. §761.05(c)(7)(ii);  and  (3) failed  to

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                             -5-






maintain records on the PCB articles and  PCB  container  as



required by 40 C.F.R. 761.80(a). These are violations of



Section 6(e) of TSCA [15 U.S.C. §2605(e)).



    Pursuant to Section 22.17 of the Consolidated Rules of




Practice, the penalty proposed to be assessed  in the First



Amended Complaint,  $26,000.00, shall become due and payable



by Respondent,  Carolina Transformer Co.,  Inc., without  further



proceedings.
                            ORDER




    Pursuant  to Section  14(a)  of the Federal Insecticide,




Fungicide and Rodenticide  Act,  as amended, a civil penalty of




$26,000.00 is hereby assessed  against Respondent, Carolina



Transformer Co. ,  Inc.  for  violations of the Act found herein.






    Payment of the  full  amount  of the civil penalty assessed




shall be made within sixty (60)  days of the service of the  .

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                              -fa-


 final order  upon  Respondent,  Carolina  Transtormer Co., Inc.,

 by  forwarding  to  the  Regional Hearing  Clerk a casnier's check

 or  certified check  payable to the  United  States of America in

 such  amount.I/
                              TnornSs '&. Yost  /
                              Administrative/Law Judge
Dated:
   -  "     I/.  See Sec. 22.17 of the Consolidated Rules of Practice
with respect to effect and consequences of. this Deraul-tr Order.

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                             -5-



maintain records on the PCB articles and PCB container  as

required by 40 C.F.R. 761.80(a). These are violations of

Section 6(e) of TSCA [15 U.S.C. §2605(e)].
                    •
    Pursuant to Section 22.17 of the Consolidated Rules of

Practice, the penalty proposed to be assessed in the First

Amended Complaint, $26,000.00, shall become due and payable

by Respondent,  Carolina Transformer Co., Inc., without further

proceedings.
                            ORDER

    Pursuant  to Section 16(a)  of  the Toxic Substances Control

Act, a civil  penalty, of $26,000.00  is hereby assessed against

Respondent, Carolina Transformer  Co., Inc. for violations of

the Act found herein.


    Payment of the  full amount of the civil penalty assessed

shall be made within sixty  (60) days  of  the service of the

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  '
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                                     REG ION IV
                                ATLANTA. GEORGIA 3O36S
                                       "Sandra A.  Beck
                                       Regional Hearing Clerk
DATED:  September 20,  1984
     Service of this Errata accornplished in the same manner as the
Certification of Service  (copy attached)  dated this 20th day.of
September 1984.
 IN RE                                   )
                                        )    TSCA-IV-84-0002            "/>
     CAROLINA TRANSFORMER CO.-, INC.     )                                 Co
                                        )    ERRATA TO DEFAULT ORDER     ^ ^o \
                    Respondent          )                                 •»
                                                                             -O:

     Enclosed is a corrected copy of Page 5 of the Default Order

 issued on September 19,  1984 for the above-captioned case.  It is

 requested that this corrected page be inserted into the Default

 Order and that the original Page 5 be discarded.

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                I-:LD si .xi i.s rrs'VJ^orsMCNTAL r-Roif ciio
                           WASHINGTON. D C.  2CJ60
                                                                     OF net or
                                                                  Me AOMINIVt
 IN RE                                   )
                                        )     TSCA-IV-84-0002
     CAROLINA TRANSFORMER CO. ,  INC.      )
                                        )          ORDER
                    Respondent          )


                          CERTIFICATION OF SERVICE

     In accordance with 40 C.F.R.  §§  22.17(b)  and 22.27, I hereby certify
 that the original of the  foregoing Default Order issued by Honorable
 Thomas B. Yost, along with the  entire file of this proceeding was served
 on the Hearing Clerk (A-110) , U.S. Environmental Protection Agency,
 401 M Street,  S.W. ,  Washington, D.C.  20460,  by certified mail return
 receipt requested; that a true  and correct copy was hand-delivered to
 counsel for Complainant,  Donna  hlatthews Post,  Office of Regional Counsel,
 U.S. Environmental Protection Agency,  345  Courtland Street, Atlanta,
 Georgia 30365; and that a true  and correct copy was served on counsel
 for Respondent, Ronald E. Winfrey, and Stephen J.  O'Connor, Rose,  Rand,
 Ray, Winfrey's Gregory, 214 Mason  Street,  Post Office Box 1239,  Fayetteville,
North Carolina 28302-1239, by certified mail return receipt requested.

     In no appeals are made within 20  days after service of this order,
 and the Administrator does not  elect to review it,  then 45 days  after-
 receipt this will become  the Final Decision of the Agency (40 CFR
 §§ 22. 27 (c) and 22.30).

     Dated in Atlanta,  Georgia  this 20th day of September 1984.  -
                                       -Sandra A. Beck  /
                                       Regional Hearing Clerk

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